The Korea Times close
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
Business
  • Tech
  • Bio
  • Companies
Finance
  • Companies
  • Economy
  • Markets
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
Entertainment
& Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
Sports
  • Beijing Olympics
World
  • SCMP
  • Asia
Video
  • Culture
  • People
  • News
Photos
  • Photo News
  • Darkroom
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
  • The Korea Times
  • search
  • Site Map
  • E-paper
  • Subscribe
  • Register
  • LogIn
search close
Finance
  • Companies
  • Economy
  • Markets
Thu, February 3, 2022 | 16:41
Policies
Household debt to GDP soars to record high
Posted : 2018-03-18 16:35
Updated : 2018-03-18 18:19
Print Preview
Font Size Up
Font Size Down
By Kim Yoo-chul

Household debt in proportion to gross domestic product (GDP) soared to a record high at the end of the third quarter last year, according to data from the Bank for International Settlements (BIS).

The Switzerland-based financial institution, said Korea's ratio of total household debt to GDP was 94.4 percent in September 2017, up 0.6 percentage points from the previous quarter. This was also an increase of 1.6 percentage points from the 92.8 percent at the end of 2016.

The household debt to GDP ratio has increased for 14 consecutive quarters since the second quarter of 2014, according to research conducted by the BIS.

In that time period, this was the second-sharpest increase after that of China.

The BIS said Korea's household debt-to-GDP ratio was the fifth-highest after Switzerland with 127.6 percent, Australia (120.9 percent), Denmark (116.8 percent), the Netherlands (106 percent), Norway (102 percent) and Canada (100.4 percent).

Korea's household debt has been soaring since 2014 after the government began easing regulations on mortgages, with the Bank of Korea (BOK) cutting its benchmark rate. Since August 2014, the BOK cut the key rate five times.

The results were catastrophic. Housing price growth in Korea has already eased quite sharply since 2016 but household debt continues to rise rapidly.

The debt rose to a new record in 2017 with the amount including credit purchases hitting 1,450.9 trillion won or $1.3 trillion, up 8.1 percent from 2016, according to the BOK.

To cool the booming property market and soothe speculative trading, the Moon Jae-in administration has introduced measures to slow debt growth and prevent overheating in the property market. The government is teaming up with relevant agencies to address the issue. It is concerned that the high level of debt, combined with higher interest rates, could cause vulnerable households to default.

In a related note, Fitch Ratings said the Korean economy expanded by a strong, above-trend 3.1 percent in 2017 due to supportive economic policies and financial conditions and by buoyant, albeit cooling, construction output growth.

But the ratings agency is concerned that overall investment growth is likely to keep cooling, dragged down by construction.

"The slowdown in construction is being partly engineered by the authorities, who have been stepping up their efforts to cool the housing sector and address systemic housing risks. Measures include an increased capital tax gain on house sales and stronger requirements for loan-to-value ratios and debt-to-income ratios in certain areas (including Seoul)," it said in its report.



Emailyckim@ktimes.com Article ListMore articles by this reporter



 
  • Lee, Yoon clash over health insurance coverage for foreign residents
  • Woowa Brothers pressed to earn more for Delivery Hero
  • Korea's new blue passport unavailable to some
  • Concerns rise over post-holiday surge in COVID-19 cases
  • Will NPS file lawsuits against HDC, Kakao, Emart?
  • Calls mount for stricter punishment of animal abusers
  • Presidential hopefuls get ready for first TV debate
  • Korean companies on edge due to mounting Russia-Ukraine tension
  • Record trade deficit prompts concerns over capital flight
  • LGES expects more money influx with MSCI index inclusion
  • [INTERVIEW] 'Our Beloved Summer' creator on depicting nostalgic young romance [INTERVIEW] 'Our Beloved Summer' creator on depicting nostalgic young romance
  • Former Miss USA Cheslie Kryst, 30, found dead after fall from Manhattan building Former Miss USA Cheslie Kryst, 30, found dead after fall from Manhattan building
  • From Seori to BIBI, more Korean singer-songwriters steal global attention From Seori to BIBI, more Korean singer-songwriters steal global attention
  • Rihanna expecting first baby with rapper A$AP Rocky Rihanna expecting first baby with rapper A$AP Rocky
  • Actor Park Bo-gum passes barber license exam during military service Actor Park Bo-gum passes barber license exam during military service
DARKROOM
  • Daily life in Beijing as 2022 Winter Olympic Games kick off

    Daily life in Beijing as 2022 Winter Olympic Games kick off

  • Celebrating Lunar New Year amid the ongoing pandemic

    Celebrating Lunar New Year amid the ongoing pandemic

  • Daily life in Afghanistan under Taliban rule

    Daily life in Afghanistan under Taliban rule

  • How snow looks around the world

    How snow looks around the world

  • Pictures of the year 2021

    Pictures of the year 2021

The Korea Times
CEO & Publisher : Oh Young-jin
Digital News Email : webmaster@koreatimes.co.kr
Tel : 02-724-2114
Online newspaper registration No : 서울,아52844
Date of registration : 2020.02.05
Masthead : The Korea Times
Copyright © koreatimes.co.kr. All rights reserved.
  • About Us
  • Introduction
  • History
  • Location
  • Media Kit
  • Contact Us
  • Products & Service
  • Subscribe
  • E-paper
  • Mobile Service
  • RSS Service
  • Content Sales
  • Policy
  • Privacy Statement
  • Terms of Service
  • 고충처리인
  • Youth Protection Policy
  • Code of Ethics
  • Copyright Policy
  • Family Site
  • Hankook Ilbo
  • Dongwha Group