Household debt rose by 13.6 trillion won in 2019Debt incurred by households and self-employed businesses in Korea is estimated to have broken 2,000 trillion won ($1.7 billion) as of September last year, according to central bank data on Sunday.
Outstanding household loans came to 1,481 trillion won at the end of last September, up 13.6 trillion won from three months earlier, the Bank of Korea data showed.
Debt incurred by self-employed businesses reached 670 trillion won at the end of last September, up 16.3 trillion won from three months ago.
Cho Young-moo, a researcher at the LG Economic Research Institute, said self-employed business owners have taken out more loans as business conditions worsened due to lackluster consumption.
Although a mountain of household debt is unlikely to pose a systemic risk to the Korean economy in the near future, the sheer size of household debt is placing the economy under pressure and capping private spending.
In the second quarter of last year, Korea’s household debt-to-disposable income ratio stood at 186.1 percent. The average ratio of 15 OECD member states was some 130 percent in 2018.