S. Korea’s household debts at nearly 1.7 times of household income: data

SEOUL, June 15 (Yonhap) -- South Korea's household debts stood at nearly 1.7 times their disposable income, data showed Sunday, with the pressure for loan repayment driving down consumer spending, potentially triggering an economic recession. The debt-to-income ratio for South Korean households and nonprofit organizations came to 174.7 percent as of end-2024, according to Bank of Korea data submitted to Rep. Cha Gyu-geun of the minor Rebuilding Korea Party. Specifically, the local households' disposable income stood at 1,356 trillion won (US$990 billion), while their combined financial debts stood at 2,370.1 trillion won. The ratio had surged from 182.9 percent at the end of 2020 to 194.4 percent at end-2021, before gradually falling to 191.5 percent in 2022, 180.2 percent in 2023 and 174.7 percent last year. Despite the improvement in the debt-to-income ratio, South Korea still ranks relatively high among the Organization for Economic Cooperation and Development (OECD) member nations. The country's tentative ratio marked 186.5 percent as of late 2023, only behind Switzerland at 224.4 percent, the Netherlands at 220.3 percent, Australia at 216.6 percent, Denmark at 212.5 percent and Luxembourg at 204.4 percent, the same data showed. A notice of a housing mortgage loan is posted at a bank in Seoul on Dec. 2, 2024, when the government scaled back the line of credit on apartment mortgages in the greater Seoul area. (Yonhap) sookim@yna.co.kr(END)