Sejong, April 5 (Yonhap) – Household indebtedness in South Korea has grown faster than most major economies, reaching nearly 100 percent of GDP, according to a report by the Korea Institute of Public Finance (KIPF).
As of the end of June last year, the domestic debt ratio was 98.6 percent of the GDP.
This number is much higher than the global average, 63.7 percent, and for advanced economies, 75.3 percent.
The growth rate of household indebtedness in South Korea was much faster than in other countries.
South Korea’s debt ratio recorded at the end of June increased by 27.6 percentage points compared to 2008, compared to a global average increase of 3.7 percentage points and a drop of 0.9 percentage points among developed countries.
Short-term debt accounted for 22.8 per cent of total household debt in South Korea, much higher than those of France of 2.3 per cent, Germany 3.2 per cent, Germany 4.5 per cent, Spain and 11.9 per cent of the United Kingdom.
The US recorded a short-term debt ratio of 31.6 percent, making it the only major economy with a higher figure than South Korea.
The institute expressed its concerns that the rapid rise in interest rates could significantly increase the domestic debt burden, which could affect the local economy.