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South Korea Facing Serious Household Debt Situation
Korea’s Corporate Debt Also Growing Rapidly
South Korea Facing Serious Household Debt Situation
  • By Jung Suk-yee
  • April 8, 2019, 10:37
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South Korea’s household debt-to-GDP ratio increased by 3.1 percentage points to 97.9 percent in 2018.

The Institute of International Finance announced on April 7 that South Korea’s household debt-to-GDP ratio increased by 3.1 percentage points to 97.9 percent in 2018.

During the same period, the average ratio of 34 major developed and developing economies edged up from 59.4 percent to 59.6 percent, that of the developed economies fell from 73.1 percent to 72.7 percent, and that of the developing economies including China slightly rose from 36.4 percent to 37.6 percent. In addition, those of the United States and the eurozone fell 1.6 percentage points and 0.2 percentage point, respectively. In short, only South Korea’s household debt showed a rapid increase while those of the others remained steady or decreased.

South Korea’s corporate debt is increasing rapidly, too. Specifically, the country’s non-financial corporate debt amounted to 102.2 percent of its GDP at the end of last year, up 3.9 percentage points from a year ago. When it comes to the rate of increase in corporate debt-to-GDP ratio, South Korea ranked fourth among the 34 countries.

On the other hand, the global total debt increased at a slower pace last year. The institute said that the global debt, which increased by US$21 trillion in 2017, increased by US$3.3 trillion to US$243.2 trillion last year.