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Household debt

S.Korea's household debt ratio exceeds 100% for first time

By Nov 24, 2020 (Gmt+09:00)

South Korea’s household debt to gross domestic product (GDP) ratio has exceeded 100% for the first time, with its debt growing relatively faster than other leading economies.

In the third quarter, the country’s household debt ratio reached 100.6%, according to a report issued by the Institute of International Finance (IIF) on Nov. 23. 

Among 34 countries surveyed by the IIF, Korea’s household debt ratio came in second to Lebanon, which posted a household debt ratio of 116.4% with its GDP declining after the Beirut port explosion in August.

Graphics by Jerry Lee
Graphics by Jerry Lee

Graphics by Jerry Lee
Graphics by Jerry Lee

Industry experts say that Korea's soaring household debt is owing to rising demand for housing loans, mortgages and business loans while the country's GDP is expected to shrink on the back of the global pandemic crisis.

The Bank for International Settlements said that if the household debt ratio exceeds 80% then it could harm the economic growth rate, which has fueled concerns that Korea's excessive debt may dampen its growth.

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Over the past year, Korea's household debt ratio rose by 7.0 percentage points, the seventh-highest increase among surveyed countries, following Hong Kong (10.6%), Japan (7.8%) and the US (7.7%).

The country's debt-to-equity ratio of non-financial companies stood at 110.2% in Q3, ranking eighth among the 34 countries while South Korea's public debt-to-GDP ratio came to 45.9%, coming in 22nd place.

Meanwhile, global debt also hit a new record of over $272 trillion in the third quarter and is expected to reach $277 trillion by the end of this year.

Write to Ik-hwan Kim at

Danbee Lee edited this article.
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