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Koreans’ are far better able to repay their household debt than Americans at the epicenter of the financial crisis or Japanese, a survey suggests. In a report released Sunday, the Bank of Korea said the ratio of Koreans’ household debt to their financial asset increased to 45 percent in late June, from 43.3 percent in late 2007. The ratio is far higher than in the U.S. (32.2 percent) and Japan (22.5 percent).
The report said GDP was up 7.8 percent year-on-year in the first half of 2008 but financial debt up 11.3 percent.
The ratio of debt to disposable income, the indicator of debt repayment ability, increased 1.53 times as of the end of June, up from 1.48 times in late 2007. The figure is rising from 1.27 times in 2004. It is higher than in the U.S. (1.32) or Japan (1.11) as of 2007, but lower than in the U.K. (1.78).
But the report warned since household debt repayment ability has weakened, the burden of high interest is likely to further discourage consumption.
(englishnews@chosun.com )
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