Household Debt Ratio to GDP
Korea recorded the highest household debt to GDP ratio among emerging nations for 13 straight years. A quarterly Bank of International Settlement (BIS) report revealed on February 8 that Korea’s household debt to GDP ratio stood at 87.2 percent, the highest among 17 emerging economies in the third quarter of last year.
Korea was followed by Thailand (70.8 percent), Malaysia (70.4 percent), Hong Kong (67.0 percent) and Singapore (60.8 percent). China agonizing over its corporate debts chalked up 38.8 percent.
That of Japan stayed high, peaking at 74.4 percent in the first quarter of 2000 but dropped sharply. Korea rose to the level of Japan by recording 67.5 percent in the second quarter of 2006.
In the third quarter of the same year, Korea’s percentage began to surpass that of Japan only to become the country with the highest percentage. Adding 24 advanced nations to the 17 nations, Korea placed eighth among the 41 countries in terms of household debt to GDP ratios.
It was Switzerland that recorded the highest household debt to GDP ratio of 142.2 percent in the third quarter of last year. Switzerland was followed by Australia (123.1 percent), Denmark (122.9 percent), the Netherlands (111.4 percent), Canada (96.0 percent), Norway (93.0 percent), and New Zealand (91.3 percent) and etc.
The UK chalked up its household debt to GDP ratio of 86.4 percent, lower than that of Korea. Switzerland and Denmark and 19 other nations in the Euro Zone have central banks which introduced minus interest rates. It was found that loaning conditions were eased and asset prices rose in the nations that introduced low or minus interest rates including these nations.