SEOUL, KOREA - The balance of household debt during the second quarter of this year continued the record-high level. According to data released by the Bank of Korea on August 26, the household debt as of the end of June this year was 1,040.0 trillion won (US$1,022 billion). This is up 1.5 percent (15.1 trillion won) from the end of the first quarter when the comparable figure was 1,024.9 trillion won. Comparing to the figure a year ago, this is 6.2 percent (60.4 trillion won) higher.
The household debt balance had dipped slightly (quarter on quarter) in the first quarter last year, followed by five consecutive record-breaking quarters. Household debt includes loans made out by banks, secondary lenders, and insurance companies, as well as sales on credit provided by credit card companies.
The second-quarter balance of household loans outstanding was 982.5 trillion won, up 1.5 percent (14.8 trillion won) from the previous quarter. The balance of credit sales also increased 0.6 percent (300 billion won) to 57.5 trillion won.
Analysts commented that it is not the absolute level of the debt that must be paid close attention, but the speed with which the balance increases. If the economy revives and the household income level rises with it, the burden of debt may be reduced substantially without cutting back on the debt itself.
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