Household Debt at New Record High

The total debt held by households in Korea stood at a record W959.4 trillion in the fourth quarter of last year, up W23.6 trillion from the previous quarter, the Bank of Korea said on Thursday (US$1=W1,086).

Household debt has kept rising since surpassing W700 trillion in the third quarter of 2008, at the height of the global financial crisis.

But although the amount continued to rise, the pace of increase slowed from 5.8 percent in the second quarter of last year to 5.4 percent in the third quarter and 5.2 percent in the fourth.

Loans accounted for W900.6 trillion of total household debt last year, up W19.9 trillion or 5.1 percent, credit card payments amounted to W58.8 trillion, up W3.8 trillion or 7.4 percent.

"There was a marked increase in housing loans due to exemptions on acquisition and sales taxes for real estate," said a BOK official. Housing loans totaled W316.9 trillion in the fourth quarter, up W5.4 trillion compared to the previous three months.