S.Korea's household debt growth slows in Q3

Source: Xinhua | 2019-11-22

South Korea's household debt growth slowed in the third quarter on the government's efforts to control speculative investment in the real estate market, central bank data showed Thursday.

Household credit, which includes household debts extended by banks and other financial institutions as well as the purchase on credit, reached 1,572.7 trillion won (1.34 trillion U.S. dollars) as of end-September, up 15.9 trillion won (13.5 billion U.S. dollars) from three months earlier, according to the Bank of Korea (BOK).

From a year earlier, it was up 58.8 trillion won (50 billion U.S. dollars), or 3.9 percent. It marked the slowest gain in about 15 years since the second quarter of 2004.

The slower increase came as the government unveiled a series of measures to control speculative investment in the property market.

However, the debt growth continued as the BOK cut its benchmark interest rate from 1.75 percent to 1.50 percent in July, before slashing it to a record low of 1.25 percent in October.

The number of apartment transactions nationwide increased from 107,000 in the second quarter to 134,000 in the third quarter.

The ratio of household debt to disposable income was 186.1 percent in the second quarter, higher than an average 130.6 percent for member countries of the Organization for Economic Cooperation and Development as of 2018.