Korea Still Leads the World in Household Debt

Tougher loan regulations and higher interest rates have reduced new household loans, but Korea still tops the world in terms of total household debt.

The Institute of International Finance compared household debt with GDP and found that Korea's household-debt-to-GDP ratio was 104.3 percent.

Household debt swelled to W1.86 quadrillion in 2021 but edged down to W1.859 quadrillion in the first quarter of this year (US$1=W1,249). As a result, the debt-to-GDP ratio edged down 0.7 percentage point.

But the decline pales in comparison to the U.S., Japan and other major countries, where the ratio dropped as much as four percentage points after the height of the coronavirus pandemic.

Korea also ranked among the top countries in terms of corporate debt growth. The corporate-debt-to-GDP ratio stood at 116.8 percent in the first quarter, which was the seventh highest in the world after Hong Kong, Lebanon, Singapore, China, Vietnam and Japan.

Korea's ratio soared 5.5 percentage points compared to a year ago, the second fastest after Vietnam's.