(Yonhap)
Taking impact from the COVID-19 fallout, South Korea’s household debt compared to its economic size has become one of the world’s highest, while its debt grew at one of the fastest paces during the first quarter this year, a report showed Monday.
As of the end of March this year, Asia’s fourth-largest economy saw its household debt stand at 97.9 percent of its gross domestic product, which was the highest among the 39 countries reviewed by the US-based Institute of International Finance.
Next were Britain, Hong Kong and the United States, with 84.4 percent, 82.5 percent and 75.6 percent, respectively.
Also, Korea’s household debt was one of the fastest-growing among the subject states, adding 5.8 percentage points during the same period from the previous quarter, data showed.
Korea was outpaced by Hong Kong and China, which added 9 percentage points and 6.4 percentage points to the household debt-to-GDP ratio, respectively.
The Bank of Korea said earlier that the country’s household debt during the first quarter climbed at the slowest rate in one year, reaching 1,611.3 trillion won ($1.34 trillion) as of end-March.
What raised the debt-to-GDP ratio, however, was the downsized GDP which is estimated to have shed 1.3 percent on-quarter from January to March.
The coronavirus crisis also weighed down companies’ financial soundness.
As of the end of March, the outstanding debt total of nonfinancial businesses here stood at 104.6 percent of the country’s GDP, up 7.4 percentage points on-quarter, according to the IIF. The figure was the seventh-highest among the 39 countries polled.
The public sector, in contrast, came in at 28th highest in debt ratio ranking, with the overall debt coming to 41.4 percent of GDP.
“The global debt-to-GDP ratio jumped over 10 percent on-quarter in the first quarter, rising to a record-high of 331 percent,” the IIF report said.
“Such increases were conspicuous in countries such as China, South Korea, Turkey, and Mexico.”
By Bae Hyun-jung (
tellme@heraldcorp.com)