Korea’s household debt grows second-fastest among emerging economies

한국 가계빚 증가속도 신흥국 중 2위…중국 다음으로 빨라
Korea’s household debt is rising at one of the fastest rates among emerging economies,… according to one international report.
The pace is alarming,… however, some experts maintain the soundness of each loan… rather than the total amount of debt… is of more concern.
Hwang Ji-hye reports.

Korea’s household debt rose at the second-fastest pace among 19 emerging economies last year.
According to a new quarterly report by the Institute of International Finance,… the household-debt-to-GDP ratio rose over 3 percentage points in 2015 from a year ago,… following closely behind China.
The household debt burden on the population was also the third-highest,… following Singapore and Hong Kong,… with the average amount of Korea’s household debt per person standing at 29-thousand U.S. dollars.
Korea’s record-low key rate of one-and-a-half percent… coupled with a set of aggressive stimulus measures last year that included packages to prop up the country’s real estate market… have been stoking concerns of a worsening household debt problem.
The Bank of Korea says… the amount of debt currently stands at around one trillion U.S. dollars,… taking a toll on the country’s overall spending.
With that… the government last month introduced new guidelines that toughen lending requirements… and experts say… such measures will prevent the debt issue from dampening the country’s overall growth potential.

“Despite the rise in total amount, if the government manages to maintain the soundness of each loan, the issue will NOT get out-of-hand.”
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Still… many experts cite the snowballing household debt issue as a potential risk to the Korean economy.
The IIF also says… the pace of growth is alarming, which needs close monitoring.
Hwang Ji-hye, Arirang News.

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