February 22, 2023 12:33
Korea's household debt finally declined for the first time in about a decade as rising interest rates and a real estate market slump prompted more people to pay off their debt rather than take out new loans.
According to the Bank of Korea on Tuesday, Korea's total household debt edged down 0.2 percent on-quarter or W4.1 trillion in the fourth quarter last year, the largest amount on record, to W1.87 quadrillion (US$1=W1,296).
The last time household debt declined on-quarter was in the first three months of 2013.
Household debt consists of bank loans and credit card debt. Bank loans alone fell by W7.5 trillion from the third quarter to W1.75 quadrillion.
On-year loans dropped by W7.8 trillion, the first decline on record. But credit card debt increased W11.9 trillion to W117.7 trillion.
Park Chang-hyun at the BOK said, "High interest rates and a sluggish real estate market suggest that household debt is unlikely to rise again fast for the time being."
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