S.Korea c.bank warns of fast household debt growth, financial risks
SEOUL, Sept 20 (Reuters) - South Korea's central bank warned
on Thursday that household debt was growing much faster than the
Organization for Economic Cooperation and Development average as
large mortgages and high rents drive up indebtedness.
"Since the end of the global financial crisis, South
Korea's household debt growth has significantly exceeded that of
the OECD, and the trend will continue," the Bank of Korea (BOK)
said in a financial stability report.
Debt-to-disposable income at South Korean households was at
161.1 percent in the second quarter, up from 159.8 percent at
the end of 2017, the report showed.
Total household debt stands at 1,493.2 trillion won ($1.33
trillion) as of the second quarter, up 7.6 percent from a year
The BOK also warned that the number of households vulnerable
to debt default is increasing as their debt-servicing capacity
is stretched by rising interest rates and low wage growth.
Rising interest rates in the United States have driven up
South Korean borrowing costs, leaving households little cash for
discretionary spending as they are squeezed by large mortgages
and high rents in a red-hot property market.
($1 = 1,119.1000 won)
(Reporting by Cynthia Kim
Editing by Eric Meijer)
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