Excess funds held by South Korean households and non-profit agencies fell to their lowest level in three quarters in the third quarter as consumer spending rose, the central bank said Friday.

The value of their excess funds amounted to 21.4 trillion won (US$20.3 billion) in the July-September period, down from 28.2 trillion won three months earlier, according to the Bank of Korea (BOK).

The third-quarter data marked the smallest amount since the fourth quarter of 2012 when such funds reached 20.4 trillion won.

Excess funds refer to the volume of money that remains on the balance sheets of households after people manage available funds via deposits and stock investments.

The data came as the South Korean economy grew 1.1 percent on-quarter in the third quarter, the same pace as in the second quarter, on improving domestic demand and a pickup in facility investment. In the cited period, private spending gained 1.1 percent on-quarter after rising 0.7 percent in the second quarter.

The ratio of their financial assets against debt came in at 2.16 as of end-September, unchanged from three months earlier, the BOK said.

Korea's household debt problems are cited as the main bugbear for policymakers as high household indebtedness crimps consumer spending, hurting the economic growth. Korea's household credit amounted to a record 991.7 trillion won as of the end of September.

Local companies' fund shortages, meanwhile, expanded in the third quarter from three months earlier as their sales remained sluggish amid lingering economic uncertainty.

The value of local firms' capital shortages amounted to 20.9 trillion won in the July-September period, compared with fund shortages of 1.3 trillion won in the second quarter, according to the BOK.

The BOK said that the value of corporate fund shortages rose last quarter as sluggish sales led to a shortage of operating funds, making the local firms tap further into outside funding.

State-run companies' debt, meanwhile, reached 397.3 trillion won as of end-September, down from 402.3 trillion won from three months earlier, the central bank said.

The ratio of public firms' debt against economic output came in at 30.5 percent as of the end of the third quarter, down from 31.2 percent in the second quarter.

Experts said that growth in debt by state-run firms is one of the potential risks for Korea, but it is not tallied as government debt when calculated under the latest international standards. (Yonhap News)