Korea's savings rate has reached the highest level in almost 20 years amid fears that consumption is drying up even further. Less private spending means slower production of goods and a decline in new hires.

Korea's savings rate in the first quarter of this year reached 36.9 percent, the highest since 37.2 percent in the third quarter of 1998, at the height of the Asian financial crisis.

In the first quarter of 1998, the rate soared to 40.6 percent as banks paid up to 17.71 percent interest. But now banks pay at best 1.45 percent and buoyant exports point to a gradual emergence from the slump.