S. Korea's household debts calming down: financial watchdog

Source:Xinhua Published: 2017/11/23 15:36:10

South Korea's financial watchdog head said Thursday that household debts, which have kept a record-breaking trend until recently, began calming down as the government announced a set of measures to curb it.

Choe Heung-sik, governor of the Financial Supervisory Service (FSS), said in a meeting with foreign correspondents here that the household debt growth is seen calming down currently following the government measures.

The government under President Moon Jae-in, which was inaugurated in May, unveiled measures to curb speculative investment among multiple home owners into the real estate market and tighten standard for home-backed loans.

For the first nine years under conservative governments, the household debts rapidly increased on eased regulations on mortgage financing and the record-low borrowing costs.

The Bank of Korea (BOK) lowered its benchmark interest rate from 3.25 percent in July 2012 to an all-time low of 1.25 percent in June last year.

As the South Korean economy's fundamentals were improved, the BOK indicated its policy rate increase as early as in November or early next year.

The country's exports kept rising on the back of strong demand for locally-made semiconductors, and consumption in the domestic market showed signs of recovery.

This year's growth outlooks, estimated both by the government and the central bank, were revised up recently to reflect the enhanced economic fundamentals.

Despite the government measures, household debts grew at a faster pace in the July-September quarter.

According to the BOK data, household credit grew 31.2 trillion won (28.7 billion US dollars) during the third quarter, after rising 16.6 trillion won in the first quarter and 28.8 trillion won in the second quarter.

Posted in: ASIA-PACIFIC

blog comments powered by Disqus