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S. Korea's household debt balloons in Q2

All Headlines 10:12 August 18, 2019

SEOUL, Aug. 18 (Yonhap) -- South Korea's household debt rose faster than the economic growth in the second quarter, raising concerns of overleveraging by individual borrowers and its impact on domestic consumption, data showed Sunday.

The household debt in Asia's fourth-largest economy was estimated at 146.7 trillion won (US$121.1 billion) as the end of June, adding 15.4 trillion won from three months earlier, according to the Bank of Korea (BOK).

The private loans gained 3 trillion won in the first quarter amid shrinking housing sales, but they swelled in the second quarter on the back of a recovery in the real estate market.

The household debt rose at an even faster clip in July compared with the previous two months, adding 5.8 trillion won last month, the BOK said.

If the current trend continues, private loans are expected to surpass 1,500 trillion won in the coming months.

Experts raise concerns over the ballooning household debt at a time of low growth as it could suppress domestic consumption, which could further weigh on the economy.

The household debt rose 4.1 percent in the second quarter from a year earlier, surpassing the growth of the gross domestic production and household income, which stood at 3 percent and 3.9 percent, respectively, in the same period.

A pedestrian passes by a bank in downtown Seoul on Aug. 4, 2019, in this file photo. (Yonhap)

ejkim@yna.co.kr
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