People shop for clothes at a department store in Seoul on April 1, 2022. (Yonhap)
SEOUL, April 7 (Korea Bizwire) — Excess funds held by South Korean households and nonprofit organizations fell last year from a year earlier as private spending increased amid the economic recovery, central bank data showed Thursday.
Net financial funds — the value of financial assets minus financial liabilities — held by local households and nonprofit organizations serving households amounted to 141.2 trillion won (US$116 billion) last year, down 48.7 trillion won from a year earlier, according to the Bank of Korea (BOK).
Excess funds refer to the volume of money that remains on the balance sheets of households after people manage available funds via deposits, stock investments and other means.
The fall in excess funds came as private spending increased amid the economic recovery and demand for bank loans rose to buy homes, the central bank said.
The South Korean economy expanded 4 percent last year, the fastest growth in 11 years, on the back of robust exports and improving private spending.
Households and nonprofit organizations borrowed a record high of 192.1 trillion won last year, up from 173.9 trillion won a year earlier.
Of the amount, borrowing from financial institutions reached an all-time high of 189.6 trillion won.
More South Koreans took out loans last year to buy houses and invest in stocks, spawning concerns about snowballing household debt.
Last year, the value of funds management reached 333.3 trillion won, down from 363.8 trillion won the previous year.
Of the amount, they invested 110.5 trillion won in local and oversea stocks. Of the total financial assets held by households and nonprofit agencies, the proportion of stockholdings exceeded the 20 percent mark for the first time last year, hitting 20.8 percent as of end-2021.
Meanwhile, local companies’ net borrowing declined on-year last year as their operating profits rose amid robust exports, the BOK said.
The net borrowing of nonfinancial enterprises came to 74.3 trillion won, compared with a fund shortage of 89.6 trillion won.
The government also saw their net borrowing decline last year as tax revenue sharply rose despite an increase in its fiscal spending.
The fund shortage of the government fell to 12.7 trillion won last year from 20.6 percent in 2020.
(Yonhap)
