Korea’s household debt share vs GDP 8th highest among 43 economies: BIS

Household debt has been growing faster than the economy in South Korea for nine straight years since 2010, with its share against the nominal gross domestic product (GDP) now at the eighth highest among 43 economies.

According to the Bank for International Settlement (BIS) on Monday, Korea’s household debt against its nominal GDP reached 92.9 percent as of the end of June, up 2.6 percentage points from a year earlier and growing at the third fastest pace after Hong Kong and China.

Korea’s household debt-to-GDP ratio was the eighth highest among the 43 countries.

The rise in household debt outpaced GDP growth since the third quarter 2010, although the pace has been slowing since 2017 under tougher regulation on mortgage-backed loans.

Household debt reached 1,768.8 trillion won, growing 4.7 percent on year in the second quarter but slowing from gains of 5.2 percent in the first quarter and 7.9 percent in the final quarter of 2017.

During the same period, nominal GDP growth was 1.3 percent in the second quarter this year versus 4.7 percent gain in the fourth quarter of 2017.

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