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S. Korea's household debt to GDP at highest level among 34 economies

May 29, 2023 - 11:37 By Yonhap
This undated file photo shows a notice about mortgage loans at a bank in Seoul. (Yonhap)

South Korea's household debt-to-gross domestic product ratio stood at the highest level among 34 major economies in the first quarter, global financial data showed Monday.

The ratio stood at 102.2 percent in the January-March period, followed by Hong Kong with a ratio of 95.1 percent, Thailand with 85.7 percent, Britain with 81.6 percent, the United States with 73 percent, Malaysia with 66.1 percent, Japan with 65.2 percent and China with 63.6 percent, according to the Institute of International Finance.

Korea was the only country whose household debt exceeded its GDP in the first quarter. But its debt-to-GDP ratio fell 3.3 percentage points from 105.5 percent in the same period of last year, the IIF data showed.

The Bank of Korea's continued rate hikes last year helped keep the country's household debt from rising further in the first quarter. The central bank raised its key interest rate by 3 percentage points since August last year to 3.5 percent in January.

But it was difficult to sharply lower the ratio, as some households took bank loans for investments and their living due to the lingering impact of the COVID-19 pandemic. (Yonhap)