Korea's household budget has surpassed 1,500 trillion won. The debt growth rate is slowing, but the pace of income growth is falling even further, raising households' burden on debt payments.
According to the Bank of Korea`s third-quarter household credit (sleeping), household credit balance rose 22 trillion won from 11492.4 trillion won at the end of the third quarter to 151.4 trillion won. Household debt has increased by around 100 trillion won in the first year since the amount surpassed 1,400 trillion won in the third quarter of last year. Household loans (1427.7 trillion won) rose by 18.5 trillion won for the first three months, while sales of credit cards and financial institutions rose by 3.6 trillion won. 메이저사이트추천
Household loans have increased around bank mortgage loans (+14.2 trillion won). Mortgage loans include general mortgage loans as well as rental loans and collective loans. "As the volume of apartment purchases exceeded 100,000 units a quarter this year, many of them were purchased on a war-torn basis, group loans and loan loans are expected to increase," said Moon So-sang, head of the financial statistics team. However, the Bank of Korea understands that the increase in general mortgage loans, which the government is targeting the main target of household loans, is minimal. The strengthening of regulations on collective loans by the two financial institutions, including mutual finance, has also contributed to the wind-up effect of the demand for loans being driven by banks.
Sales of new products increased by 1.5 trillion won from the second quarter due to an increase in credit card usage around the Chuseok holiday.
The Bank of Korea (BOK) diagnosed that household credit growth is slowing as the volume of household credit has decreased from the previous quarter (+24.1 trillion won) and the previous year (+31.4 trillion won). Compared to the average household credit increase of 30.5 trillion won in the third quarter from 2015 to 17, the increase was significantly reduced. The quarterly household credit growth rate (compared to the previous year) was the lowest since the fourth quarter of last year, with the growth rate falling for seven consecutive quarters since the fourth quarter of last year, 6.7 percent in the third quarter.
But the problem is that the pace of household income, which is directly linked to the ability to repay debt, is falling behind the pace of debt growth due to the economic slump. Real gross domestic income (GDI) growth, a proxy indicator of household income growth, continued to fall since 5.2 percent in the third quarter of last year, recording -0.2 percent in the third quarter of this year. As a result, the gap between GDI and household credit has increased for four consecutive quarters since the third quarter of last year, reaching 6.9 percent. Moreover, it is hard to expect a sharp fall in the rate of household increase as the volume of housing purchases that cause demand for household loans is expected to remain high until the end of the year. In fact, household loans increased by more than 10 trillion won last month, the biggest increase in nearly two years.