Household Debt Soars to 90% of GDP

Korea's household debt has reached 90 percent of the nation's GDP for the first time, prompting financial authorities to consider drastic measures.

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According to the Bank of Korea on Wednesday, household debt stood at a whopping W1,435 trillion at the end of the second quarter, compared to a GDP of W1,594 trillion (US$1=W1,124).

Household debt includes loans and credit card debt.

The ratio of household debt to GDP has been growing steadily. It took six years to rise from 70 to 80 percent but just three-and-a-half years to rise to 90 percent.

BOK officials are concerned about the speed of the increase.

And debt keeps rising. As of the end of last month, household loans from banks stood at W688.4 trillion, up W6.1 trillion from the end of August and the second-highest rate of growth on record.

Also, 87 percent of household loans taken out last month were housing loans, demonstrating how heated the real estate market has become.