This Year, South Korea's Total Debt Expected to Surpass '6000 Trillion Won' for the First Time in History

GDP to GDP Ratio Up 4.9 Points in One Year... Only South Korea Among OECD Countries Increased

[Image source=Yonhap News]

This year, the total debt scale of South Korea, combining household, corporate, and government debt, is expected to surpass 6000 trillion won for the first time in history.

According to data from the Bank for International Settlements (BIS) on the 21st, Korea's non-financial sector credit in Korean won at the end of the second quarter this year was recorded at 5956.9572 trillion won. Non-financial sector credit is the total amount of debt from major economic agents?households, corporations, and government?based on the financial flow statistics for cross-country comparison.

Among these, household debt amounted to 2218.3581 trillion won, corporate debt to 2703.3842 trillion won, and government debt to 1035.2149 trillion won, respectively.

Considering that total debt at the end of June increased by 4% compared to a year earlier (5729.9946 trillion won), it is possible that the total debt already surpassed 6000 trillion won by the end of the third quarter. The data for the end of the third quarter will be released next year.

Ratio of Total Debt to GDP, Only South Korea Increased Among OECD Countries

Recently, South Korea was the only country among the Organization for Economic Cooperation and Development (OECD) where the ratio of total debt to gross domestic product (GDP) increased.

Separately from the total debt amount, looking at the ratio to GDP, South Korea's total debt to GDP ratio was 273.1% at the end of the second quarter this year, up 4.9 percentage points from the same period last year.

During the same period, the household debt to GDP ratio decreased from 105.1% to 101.7%, but the corporate debt ratio (117.6→123.9%) and government debt ratio (45.5→47.5%) both increased.

Among the 31 OECD member countries included in the BIS data, South Korea was the only country where the total debt to GDP ratio increased over one year. The average total debt to GDP ratio of the 31 countries decreased by 14 percentage points from 243.5% at the end of the second quarter last year to 229.4% at the end of the second quarter this year.

Portugal (284.3→251.1%), Greece (303.0→268.6%), and Ireland (233.3→198.8%) saw their total debt to GDP ratios decrease by more than 30 percentage points.

Italy (257.7→243.1%), Denmark (251.9→237.2%), T?rkiye (116.7→100.4%), Austria (228.2→206.6%), the United Kingdom (261.8→236.7%), Spain (268.5→241.1%), and the Netherlands (283.9→255.1%) also experienced declines greater than the average.