SEOUL, March 4 (Korea Bizwire) — The debt owed by households and small businesses in South Korea rose at one of the world’s fastest rates in 2019 in terms of its ratio to the country’s gross domestic product (GDP), data showed Wednesday.
According to the data from the Bank for International Settlement, outstanding debt extended to households and small businesses here came to 1,790.5 trillion won (US$1.5 trillion) as of the end of September, up 4.5 percent from a year earlier.
The rate of increase was the 25th-highest among 43 countries.
However, in terms of debt ratio to nominal GDP, South Korea’s household debt jumped 2.7 percentage points to 93.9 percent, the fourth-fastest rise in the world, after Hong Kong with a 7.7 percentage point spike, China’s 3.5 percentage point rise and Norway with a 2.9 percentage point increase, according to the data.
South Korea’s real GDP is estimated to have expanded 2.0 percent in 2019, but the growth of its nominal GDP is estimated at 1.1 percent, the slowest growth since 1998.
Still, South Korea’s debt-to-GDP ratio was the seventh-highest among the 43 countries with available data.
The debt ratio of Switzerland was the highest, at 131.6 percent, followed by Australia with 119.8 percent and Denmark with 113.5 percent, the data showed.
Meanwhile, the Bank of Korea earlier said overall household debt, including credit card spending, came to a record high of about 1,600 trillion won as of end-2019.
The amount marked a 4.1 percent increase from a year earlier, the slowest on-year gain since 2003.