Households' excess funds up sharply in 2019

SEOUL, April 8 (Yonhap) -- Excess funds held by South Korean households jumped sharply from a year earlier in 2019, central bank data showed Wednesday, possibly due to government efforts to curb real estate speculation.

Net financial funds held by households, including nonprofit organizations, came to 91.8 trillion won (US$75.3 billion) as of end-2019, up from 52.7 trillion won tallied a year earlier, according to preliminary data from the Bank of Korea (BOK).

The BOK did not offer any reasons for the increase, but it earlier noted the anti-speculation steps may have prevented excess funds from finding their way into the real estate market.

The government has introduced a wide range of steps aimed at curbing real estate speculation, including a sharp increase in property taxes and a complete ban on mortgages for homes over a set price.

Local firms, on the other hand, expanded their borrowing amid a steady decline in exports and sluggish sales at home in 2019.

Non-financial companies increased their net borrowing to 72.9 trillion won in the year, compared with 44.4 trillion won in 2018.

South Korea's exports dropped from a year earlier in every month of 2019 and posted 14 consecutive months of decline between December 2018 and January 2020.

Its economy grew 2 percent last year, the slowest since 2009.

Excess funds held by the government shrank to 38.3 trillion won last year from 55 trillion won a year earlier, apparently due to increased government spending aimed at boosting the local economy.

bdk@yna.co.kr
(END)