South Korea's Household Debt Still Highest Globally... Second Largest Decline Worldwide

International Financial Institute (IIF) Global Debt Report

A real estate mortgage loan interest rate chart is posted on the exterior wall of a branch of a major bank in Seoul. Photo by Jinhyung Kang aymsdream@

Last year, household debt in South Korea remained the highest in the world. However, the rate of decline was the second largest, indicating the impact of sustained high interest rates.

According to the latest Global Debt report by the International Institute of Finance (IIF) on the 3rd, as of the fourth quarter of last year, South Korea had the highest household debt-to-GDP ratio among 33 countries worldwide (with the Eurozone counted as a single statistic) at 100.1.

Following South Korea were Hong Kong (93.3%), Thailand (91.6%), the United Kingdom (78.5%), and the United States (72.8%). South Korea has held the title of the country with the highest household debt in the world for nearly four years since the start of the COVID-19 pandemic in 2020.

However, compared to a year ago, South Korea's household debt ratio decreased by 4.4 percentage points, the second largest drop after the United Kingdom's 4.6 percentage points.

This is 5.4 percentage points lower than the peak in the first quarter of 2022 (105.5%). If this trend continues, the household debt ratio is likely to fall below 100% this year.

If this happens, South Korea's household debt ratio will drop into the 90% range for the first time in about four years since it surpassed 100% in the third quarter of 2020 (100.5%).