S. Korea's household debt to GDP at highest level among 34 economies

SEOUL, South Korea - South Korea's household debt-to-gross domestic product (GDP) ratio stood at the highest level among 34 major economies in the first quarter, global financial data showed Monday, reported Yonhap..

The ratio stood at 102.2 per cent in the January-March period, followed by Hong Kong with a ratio of 95.1 per cent, Thailand with 85.7 per cent, Britain with 81.6 per cent, the United States with 73 per cent, Malaysia with 66.1 per cent, Japan with 65.2 per cent and China with 63.6 per cent, according to the Institute of International Finance (IIF).

Korea was the only country whose household debt exceeded its GDP in the first quarter. But its debt-to-GDP ratio fell 3.3 percentage points from 105.5 per cent in the same period of last year, the IIF data showed.

The Bank of Korea's continued rate hikes last year helped keep the country's household debt from rising further in the first quarter. The central bank raised its key interest rate by 3 percentage points since August last year to 3.5 per cent in January.

But it was difficult to sharply lower the ratio, as some households took bank loans for investments and their living due to the lingering impact of the Covid-19 pandemic. - BERNAMA-YONHAP