S.Korea's household debt hits record high in 2018

Source: Xinhua| 2019-02-22 12:42:35|Editor: ZX
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SEOUL, Feb. 22 (Xinhua) -- South Korea's household debt hit a new high last year though the growth rate logged a five-year low on the government's efforts to control speculative investment in the real estate market, central bank data showed Friday.

Household credit reached a record high of 1,534.6 trillion won (1.36 trillion U.S. dollars) as of the end of 2018, up 83.8 trillion (74.5 billion U.S. dollars), or 5.8 percent, from a year earlier, according to the Bank of Korea (BOK).

It was the lowest increase since 2013 as the government unveiled a set of measures to curb speculative investment in the property market with borrowed money.

Household debt, however, continued to break previous records as the BOK left its benchmark interest rate at a low level. The bank raised its target rate to 1.75 percent in November last year, but it remained low compared with the U.S. policy rate of 2.25-2.50 percent.

Despite the slower rate of growth, household debt expanded at a faster speed than household income.

The household credit refers to debts owed by households to banks, non-bank lenders and other financial institutions as well as purchase on credit.

Household debts owed to banks expanded 7.9 percent in 2018, after rising 7 percent in the previous year. The debts extended by non-bank lenders were up 2.2 percent in 2018, the lowest increase since 2002.