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Biz News Korea(Eng)
Korea’s household debt growth fastest after China among 43 nations in H1
- Collected
- 2017.12.11
- Distributed
- 2017.12.12
- Source
- Go Direct
According to the BIS on Sunday, Korea’s household debt level as of June was tantamount to 93.8 percent of its gross domestic product (GDP), up 1 percentage point from the end of 2016. The rise trailed only China whose household debt against GDP rose 2.4 percentage points over the same period.
Korea’s household debt ratio to its GDP was the eighth highest among the 43 countries, according to the bank. The country had ranked 13th in 2011 with a ratio of 79.7 percent, but moved up to the eighth place in 2015. The share outpaced the U.S. with 78.2 percent, the Eurozone with 58.1 percent, Japan with 57.4 percent and the U.K. with 87.2 percent.
Household debt in Korea amounted to 1,419 trillion won ($130 billion) as of the end of September, expanding 363 trillion won or 34.3 percent over the past three years. Market experts attribute the gain to the government’s easing of loan regulations from August 2014 and interest rate cuts by the central bank.
The BIS warned that the high debt level and its fast growing pace in Korea would undermine the nation’s long-term economic growth.
The government recently announced a set of measures to curb the snowballing debt in the household sector, including loan restrictions on multiple home owners and tougher lending rules for mom and pop business owners and loans from secondary banks.
In synchronized effort, the Bank of Korea bumped up the base rate for the first time in more than six years.
By Sohn Il-seon and Choi Mira
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]