ID :
190248
Wed, 06/22/2011 - 05:40
Auther :
Shortlink :
https://oananews.org//node/190248
The shortlink copeid
Household capacity to service debt worsens in Q1: data
SEOUL (Yonhap) - South Korean households' capacity to service debt worsened in the first quarter as their debt expanded faster than income growth, data showed Wednesday, spawning concerns that rising household indebtedness may crimp economic growth.
South Korea's household credit, including loans and credit purchasing, reached 801.4 trillion won (US$744.5 billion) as of the end of March, up 8.4 percent from a year earlier, according to the Bank of Korea (BOK).
Meanwhile, the country's gross national disposal income (GNDI) reached 287.6 trillion won in the first quarter, up 7.6 percent from the previous year.
The ratio of household credit to GNDI came in at 2.79, a gauge measuring the level of household indebtedness against disposable income, in the first quarter, up 2.76 tallied in the first quarter of 2010, according to the data.
The ratio shot up to 2.83 in the first quarter of 2009 when the country was reeling from the impact of the global financial crisis.
The data came as snowballing household debt is becoming a source of headache for Korean policymakers because it is feared to drag down the economy.
A tightening bias by the BOK is putting more burdens on households' ability to repay the already high debt, but a delay in the timing of a rate hike also aggravates households' indebtedness by spurring loan demand. The BOK hiked the key rate to 3.25 percent in June, the third increase this year, in a bid to tame inflation.
Rising inflation is eating into households' income growth and purchasing power, leading the country's domestic demand to grow at a sputtering pace.
The government plans to unveil a set of measures to stem the fast growth of household debts this month in an effort to tackle potential market instability.
The financial watchdog said it plans to make efforts to adjust the growth pace of household debt and induce local financial firms into extending home loans with fixed lending rates.
South Korea's household credit, including loans and credit purchasing, reached 801.4 trillion won (US$744.5 billion) as of the end of March, up 8.4 percent from a year earlier, according to the Bank of Korea (BOK).
Meanwhile, the country's gross national disposal income (GNDI) reached 287.6 trillion won in the first quarter, up 7.6 percent from the previous year.
The ratio of household credit to GNDI came in at 2.79, a gauge measuring the level of household indebtedness against disposable income, in the first quarter, up 2.76 tallied in the first quarter of 2010, according to the data.
The ratio shot up to 2.83 in the first quarter of 2009 when the country was reeling from the impact of the global financial crisis.
The data came as snowballing household debt is becoming a source of headache for Korean policymakers because it is feared to drag down the economy.
A tightening bias by the BOK is putting more burdens on households' ability to repay the already high debt, but a delay in the timing of a rate hike also aggravates households' indebtedness by spurring loan demand. The BOK hiked the key rate to 3.25 percent in June, the third increase this year, in a bid to tame inflation.
Rising inflation is eating into households' income growth and purchasing power, leading the country's domestic demand to grow at a sputtering pace.
The government plans to unveil a set of measures to stem the fast growth of household debts this month in an effort to tackle potential market instability.
The financial watchdog said it plans to make efforts to adjust the growth pace of household debt and induce local financial firms into extending home loans with fixed lending rates.
