Household debt among the world’s fastest risingKorea’s household debt grew at the third-fastest pace in the world in 2016 from a year ago, data showed Sunday, sparking concerns it may come as a time bomb for Asia’s fourth-largest economy.
The ratio of Korea’s household debt to gross domestic product (GDP) came to 92.8 percent as of end-2016, up 4.7 percentage points from a year earlier, according to the data from the Basel, Switzerland-based Bank for International Settlements (BIS).
The pace of growth marked the third fastest among 43 major economies in the world. Norway came in first with 6.3 percentage points, trailed by China with 5.6 percentage points.
The portion of Korea’s household debt to its GDP placed eighth among the nations last year, unchanged from the previous year. It was the highest among 18 emerging economies.
Comparable figures were 79.5 percent for the United States, 58.6 percent for the eurozone, 62.5 percent for Japan and 87.6 percent for Britain.
Korea’s household debt stood at US$1.26 trillion as of the end of 2016, compared with its nominal GDP of $1.4 trillion estimated by the International Monetary Fund.
Switzerland had the highest household debt-to-GDP ratio of 128.4 percent last year, followed by Australia with 123.1 percent and Denmark with 120 percent, according to the BIS data.
Korea’s snowballing household debt is widely seen as a drag on its economy, struggling to boost still sluggish exports and stubbornly anemic domestic demand. YONHAP