A Loan Information Notice at a Bank in Seoul (Yonhap)
SEOUL, March 19 (Korea Bizwire) — South Korea’s combined household, corporate, and government debt—known as national total debt—has surpassed 6,200 trillion won, according to the latest data released by the Bank for International Settlements (BIS).
As of the end of the third quarter of 2024, non-financial sector credit, measured in Korean won, reached 6,222 trillion won, up 250 trillion won (4.1%) from a year earlier and 55 trillion won (0.9%) from the previous quarter.
The debt breakdown shows corporate debt at 2,798 trillion won, household debt at 2,283 trillion won, and government debt at 1,141 trillion won. Non-financial sector credit aggregates debt across households, businesses, and the government, serving as a key indicator for cross-country comparisons.
South Korea’s total debt first exceeded 5,000 trillion won at the end of the first quarter of 2021 during the pandemic and continued its upward trajectory, surpassing 6,000 trillion won by the end of the fourth quarter of 2023.
While corporate and household debt continued to rise modestly, the most rapid growth came from government borrowing. Government debt surged by 120 trillion won (11.8%) over the past year, from 1,020 trillion won to 1,141 trillion won. Corporate debt grew by 80 trillion won (2.9%), and household debt rose by 46 trillion won (2.1%) over the same period.
Despite the increase in nominal debt, the country’s debt-to-GDP ratio has been on a downward trend. At the end of the third quarter of 2024, the ratio stood at 247.2%, its lowest point since the second quarter of 2021 (247.0%). After peaking at 252.9% in the second quarter of 2023, the ratio has fallen for five consecutive quarters.
The corporate debt-to-GDP ratio dropped to 111.1% at the end of the third quarter of 2024, continuing a four-quarter decline from 114.7%. The household debt-to-GDP ratio also fell for the fourth straight quarter, down to 90.7%, its lowest level since the first quarter of 2020.
Government debt, though relatively smaller in proportion, has remained on a steady upward slope, jumping from 41.5% at the end of 2022 to 45.3% by the third quarter of 2024.
M. H. Lee (mhlee@koreabizwire.com)
