Koreans take out debts of $354 billion over past 12 months

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Koreans take out debts of $354 billion over past 12 months

Published: 10 Oct. 2023, 20:13

PARK EUN-JEE
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The Financial Supervisory Service office in Yeouido, western Seoul. [YONHAP]

Koreans took out debts amounting to 476.9 trillion won ($353.8 billion) over the past year, data from the Financial Supervisory Service (FSS) showed Tuesday.

Twenty-eight percent of them, or 134 trillion won, were borrowed by people in their 20s to 30s, according to the data submitted to Rep. Kim Sang-hoon of the ruling People Power Party.

The FSS compiled new loans borrowed over the past 12 months from July last year at Korea’s five major banks and six major stocks brokerages.

Most of the increase came from a rise in borrowing for stock investments, with the newly borrowed amount from securities firms amounting to 293 trillion won over the 12-month period, the data showed.

Housing loans also showed an upward trend. The combined amount of mortgage loans and credit loans borrowed for property purchases increased by 183 trillion won, according to the data.

The rise in debts came with an increase in overdue payments.

The amount of overdue loans increased by 571 billion won from 1.2 trillion won in the second half of last year to 1.7 trillion won as of July this year.

“We are in urgent need of policies, such as household rules, that can touch on the soundness of the household economy situation, as the aftermath of excessively leveraged investments from the previous Moon Jae-in government persists,” Kim said.

According to the International Monetary Fund’s Global Debt Database last week, Korea’s household debt to the country’s gross domestic product came to 108.1 percent, marking the highest five-year increase among 26 nations compiled in the database.

Yonhap