The sum of government and household debts has tipped over the milestone of 3,000 trillion won ($2.26 trillion).
Banks are tightening their rules for issuing mortgages as loans surge ahead of anticipated rate cuts and stricter regulations this month.
We hope the government will be able to control the surging household debt with well-coordinated policies before it is too late.
If the government steering goes astray, it will only invite a wave of populism.
The test continues for the BOK.
Outstanding household credit rebounded in the second quarter to 1,896.2 trillion won as the surge in mortgages continued on expectations of a rate cut soon.
The outstanding household loan balance stood at 1,109.6 trillion won ($806.7 billion) as of the end of May, up 6 trillion won from a month earlier, according to the Bank of Korea.
The Bank of Korea attributed the 0.1 percent contraction to high interest rates, the sluggish housing market and strict loan issuance regulations after a record spike in the third quarter last year.
Issuing debts only spells the need for more tax collection.
Korea JoongAng Daily Sitemap
