SEOUL, Sept. 21 (Korea Bizwire) — After the onset of the global financial crisis, the speed of increase of household debt in Korean families was found to be 7.8 times the OECD average.
The aggregate of loans taken out by low income families (bottom 30 percent of the population) or by those who with low credit ratings was found to total 85 trillion won.
According to a report submitted by the Bank of Korea to its governing committee, the speed of increase of family debt in South Korea between 2009 and 2016 was 3.1 percentage points.
The speed of increase is calculated by subtracting the rate of increase of household income from the rate of increase of household debt.
Meanwhile, the OECD average for the speed of increase during the same period was only 0.4 percentage points.
This means that the increase in household income nearly matched the increase in household debt for OECD member countries, while in South Korea, the growth in household debt had outpaced the growth in household income.
In numbers, the speed of the increase of household debts in Korea was 7.8 times faster than the OECD average. The Bank of Korea expected the speed of increase of debts to continue.
“The rapid increase in accumulated debt may limit the growth of the economy and increase the potential risk that exists in the financial system,” the bank noted in a statement.
H. S. Seo (email@example.com)