South Korea's household debt on rise
South Korea's household debt has risen at a faster pace than income growth, the central bank's statistics showed Sunday.
The Bank of Korea said in a report, released by Yonhap news agency, the ratio of financial debt to disposable household income stood at 1.53 at the end of June. Lower figures indicate better capability to repay debt.
The bank said the ratio had been on the rise, with 1.27 in 2004, 1.35 in 2005, 1.43 in 2006 and 1.48 in 2007.
The report came as increasing debt, coupled with higher inflation, is eroding the purchasing power of households amid the slowing economy and the global financial meltdown.
"Amid rising interest rates, household debt rose faster than income or financial assets, which weakened households' capability to service debt. Such rising debt could sap consumer spending in the future," the report said.
South Korea's household debt totalled 660.3 trillion won (511.5 billion dollars) for the second quarter to June, 3.1 percent up from the first quarter, according to the central bank.
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