Seoul: According to a survey released on Monday, South Korea has the highest ratio of household debt to gross domestic product (GDP) among major economies in the globe, implying that it could stifle spending and impact on the economy in the future. According to reports.
As per analysis, the country's household debt was 104.2 percent of GDP as of end-June this year, the most among 37 economies, according to a survey by the Institute of International Finance.
Hong Kong came in second with 92 percent, followed by the United Kingdom (89.4 percent), the United States (79.2 percent), Thailand (77.5 percent), Malaysia (73.4 percent), and Japan (63.9percent). South Korea's ratio increased by 6 percentage points year over year, making it the fastest-growing country. South Korea is the only economy in the group with a higher level of household debt than its GDP.
South Korea is attempting to rein in household debt, which has increased at a quicker rate since 2020 as the country works to recover from the Covid-19 outbreak. According to central bank figures, household credit hit a new high of 1,805.9 trillion won (USD1.53 trillion) in June, up 41.2 trillion won from three months prior. Household debt increased 7.9percent year over year in 2020, above the prior year's 4.1 percent increase. During the second quarter of this year, debt increased by 10.3percent year over year.