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S. Korean household debt up 6.1 pct in 2018

Economy 12:00 December 20, 2018

SEJONG, Dec. 20 (Yonhap) -- The average debt of South Korean households rose 6.1 pct in 2018 from a year earlier, government data showed Friday.

The numbers, released by Statistics Korea, showed that debt per household stood at 75.31 million won (US$67,000) as of March this year, compared with an average of 70.99 million won from a year earlier.

The increase came amid lingering concerns over growing household debt in Asia's fourth-largest economy as local banks are poised to raise interest rates following the overnight rate hike by the United States.

The U.S. Federal Reserve raised rates to a range of 2.25 percent to 2.50 percent, leaving the difference between Seoul and Washington's rates at 0.5-0.75 percentage point.

Lee Ho-seung, the first vice minister of economy and finance, said in a meeting with relevant officials in Seoul that households and local companies can cope with a possible hike in market rates.

South Korea's overall household debt reached a record 1,514 trillion won (US$1.34 trillion) as of September.

The data -- which was compiled by the Bank of Korea and the Financial Supervisory Service -- said household income stood at 57.05 million won on average in 2017, up 4.1 percent from a year earlier.

Still, 67.3 percent of indebted households said they feel burdened by the need to pay principal and service their debts, according to the latest findings.

Meanwhile, 5.7 percent said it would be "impossible" for them to pay back their outstanding debts, compared with 5.2 percent in 2017.

S. Korean household debt up 6.1 pct in 2018 - 1

entropy@yna.co.kr
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