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40 million won mark broken as financial forecasts darken
December 13, 2008
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| Korea’s household debt rose during the third quarter compared to last year as the country’s economic growth lagged. It is the first time that the number had surpassed the 40 million won ($29,070) mark per household. According to the Bank of Korea yesterday, the country’s outstanding household debt - the sum of loans and credit purchases made for each household - totaled 676 trillion won between July and September, up 10.7 percent from the same stretch last year. But between the first and second quarter, debt expanded 19.8 trillion won. The gain between the second and third quarter was lower, at 15.7 trillion won. The news of on-year increases in debt comes amid grim forecasts for next year’s economic growth. The rising household debt is expected to cause already low domestic consumer demand to hit rock bottom. On the same day, the BOK said that the Korean economy will expand only 2 percent next year, down from this year’s estimated growth of 3.7 percent. If the 2 percent estimate is met, it will be the lowest growth the country has seen since 1998. Along with weak consumer demand around the world, Korea’s monthly exports sank the most in almost seven years last month, as shipments to major trade partners such as China and the United States slowed. Exports fell 18.3 percent on-year in November to $29.26 billion. The country’s outstanding household loans by financial institution amounted to 637.7 trillion won during the July to September period. This is a 14.8 trillion won gain from the second quarter. Household debt is this figure plus total purchases on credit. During the second quarter, the total loans increased by 17.9 trillion won compared to the first. Home-backed loans totaled 234.56 trillion, an increase of 5.07 trillion won from the second quarter. By Cho Jae-eun Staff Reporter [jainnie@joongang.co.kr] |
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