SEOUL, Dec 21: Debt burden at South Korean households eased this year as income grew faster than debt, an official survey found on Friday, giving some relief to policymakers fighting slowing growth in Asia’s fourth-largest economy.
Total debt at South Korean households grew by 1.7 percent on average for the year to 52.91 million won in 2012 whereas annual disposable income grew 5.8 percent in 2011, the joint survey between the central bank and two top local authorities found.
As a result, the ratio of debt to disposable income decreased to 152.3 percent in the 2012 survey from 158.5 percent last year, the Bank of Korea said in a statement, marking one of the highest in the world.
The heavily-leveraged household sector has emerged as one of the riskiest parts of the South Korean economy because the banking sector could face a severe liquidity and credit crisis if lending to households were to turn sour.
The central bank surveyed 20,000 households across the country during the second quarter of this year, along with the Statistics Korea and the Financial Supervisory Service. (AGENCIES)
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