Most Indebted Households Can't Repay Principal

      December 08, 2023 09:41

      Two out of three indebted households can only afford to service the interest on their loans but not repay any part of the principal. According to a report by the Bank of Korea, Financial Supervisory Service and Statistics Korea on Thursday, 67.6 percent of indebted households said they have trouble repaying the principal of their loans, up 3.2 percent from last year.
      Some 5.5 percent said they cannot repay their debt at all, up 0.8 percentage points.
      Household debt has increased but assets dwindled. As of the end of March, average debt per household stood at W91.86 million, up 0.2 percent on-year (US$1=W1,325). But average household assets declined by W527 million, resulting in net assets of W435 million on average, down 2.3 percent and the first decline in over a decade.
      But Park Eun-young at Statistics Korea said, "The decline in assets has to be viewed against a sharp increase in 2021 and 2022 and was due to falling real estate prices."
      Some 21.6 percent of households earned W10 million to W30 million a year, 19.8 percent W30 million to W50 million, 16.4 percent W50 million to W70 million, and 17 percent W70 million to W100 million. The proportion of households earning more than W100 million a year surpassed 20 percent for the first time ever.
      The Gini coefficient, which measures income disparity within a population, improved slightly to 0.324, down 0.005. The higher the coefficient, the greater the income disparity.
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