Koreans Spend More Money Than Ever Just Servicing Debt

The proportion of earnings Koreans spend just servicing their debt has risen to an all-time high despite near-zero interest rates.

According to data unveiled Monday by the Bank for International Settlements, Korea's household debt-service ratio in the first quarter stood at 12.4 percent, up 0.1 percentage point on-year.

That means W1.24 million out of every W10 million Koreans earn goes into servicing their debt, the highest amount since statistics began in 1999 (US$1=W1,181).

Korea's household DSR has increased 1.7 percentage point since 2015, the fastest among 17 countries whose data the bank compiles. Ten countries' household DSR decreased instead.

The proportion of household debt to GDP in Korea reached 95.9 percent in the first quarter this year, up 12.8 percentage points from 2015. The only countries with higher rates of increase over that period were China and Hong Kong.