SEOUL, Feb. 22 (Xinhua) -- South Korea's household debts kept a record-breaking trend last year amid the still low borrowing costs, central bank data showed Thursday.
Outstanding household credit, the broadest measure of household debts including those owed to banks and non-bank institutions, reached a new record high of 1,450.9 trillion won (1.34 trillion U.S dollars) as of the end of 2017, according to the Bank of Korea (BOK).
It was up 108.4 trillion won, or 8.1 percent, from a year earlier. The growing amount was smaller than rises of 117.8 trillion won in 2015 and 139.4 trillion won in 2016, respectively.
The BOK raised its benchmark interest rate by a quarter percentage point in November last year to 1.5 percent, the first rate hike in almost six and a half years.
Despite the rate increase, the borrowing costs remained low, encouraging households to purchase new home with borrowed money.
The massive household debts were seen as a potential detonator to the financial crisis of the economy as the debts already surpassed 90 percent of South Korea's gross domestic product (GDP).
The expected rate increase by the BOK would increase debt-servicing burden for households, leading to lackluster private consumption and the destabilized financial stability.
