Household Debt Growth Slows Amid Interest Hike

Household debt in Korea surpassed W1.8 quadrillion in the second quarter of this year to a new record high (US$1=W1,346). But at least the increase slowed due to rising interest rates and a decline in the housing market.

According to the Bank of Korea on Tuesday, the country's total household debt stood at a whopping W1.87 quadrillion at the end of June, up another W6.4 trillion from the previous quarter. But the increase slowed down compared to last year, when it was snowballing by tens of trillions of won every quarter. 

On-year, household debt increased by W58.8 trillion. It has been setting new records since the second quarter of 2013. 

Bank loan debt totaled W1.76 quadrillion in the first quarter, up W1.6 trillion from the first quarter, when it in fact decreased by around W800 billion.

Housing loans totaled W1 quadrillion, up by W8.7 trillion, and credit card debt rose 4.8 trillion to W111.4 trillion due to an increase in plastic spending after lockdown ended in April, according to the BOK.