Debt-servicing capability in S.Korea weakens on faster debt growth

Source:Xinhua Published: 2013-9-16 15:08:36

Debt-servicing capabilities among South Korean households weakened in the second quarter due to faster growth in financial debts than assets, central bank data showed Monday.

Financial debts owed by households and non-profit organizations were 1,182.2 trillion won (1.1 trillion US dollars) as of the end of June this year, up 25.1 trillion won from three months earlier, according to the Bank of Korea (BOK).

The growth was the highest since the fourth quarter of 2011 when the debt increased by 28.1 trillion won.

Financial assets held by households increased 19.7 trillion won from three months earlier to 2,549.6 trillion won as of end-June, slower than the rise in debts.

The ratio of financial assets to debts, gauging households' debt-servicing capability, fell to 2.16 at the end of June from 2. 19 three months ago, said the bank.

Meanwhile, household credit hit a new record high of 980 trillion won as of end-June. The figure is the broadest measure of household debts, including mortgage and credit loans from bank and non-bank depositors.

Posted in: Economy

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