SEOUL, June 6 (Bernama) — South Korea had the highest household debt-to-gross domestic product (GDP) ratio among 36 major economies in the first quarter.
The country’s household debt-to-GDP ratio came to 104.3 per cent in the January-March period, followed by Lebanon with 97.8 per cent, Hong Kong with 95.3 per cent, Thailand with 89.7 per cent and Britain with 83.9 per cent, Yonhap news agency quoted a data from the Institute of International Finance (IIF).
South Korea was the only country whose household debt exceeded its GDP among the 36 countries that include Japan, China, the United States (US) and European Union (EU).
South Korea’s outstanding household lending stood at 1,752.7 trillion won at the end of March, down 1.5 trillion won from end-December, according to data from the Bank of Korea.
Household debt-to-GDP ratios have been on the decline in global economies due mainly to rising interest rates. South Korea’s ratio fell 0.7 percentage point from 105 per cent in the same quarter of last year, the IIF data showed.
But Korea’s on-year reduction rate is far smaller than 7.2 per cent in Britain, 4.7 per cent in the US, 4.6 per cent in Japan and 2.9 per cent in the European Union.
The central bank recently said rising interest rates could turn some of the nation’s existing household loans into non-performing ones and weigh on consumption.
Sources: BERNAMA