S.Korea's household debt growth hits record high in 2020

Xinhua
14 Jan 2021, 15:19 GMT+10

SEOUL, Jan. 14 (Xinhua) -- South Korea's household debt growth hit a record high last year due to home purchase and stock investment with borrowed money, central bank data showed Thursday.

Debt owed by households to banks came in at 988.8 trillion won (900 billion U.S. dollars) as of the end of December, up 100.5 trillion won from a year earlier, according to the Bank of Korea (BOK).

It marked the biggest yearly increase since data began to be compiled in 2004.

The record-high increase came as households rushed to purchase home and invest in stocks with borrowed money amid the record-low policy rate.

The BOK left its benchmark interest rate unchanged at an all-time low of 0.50 percent since May.

Mortgage loan, extended by banks to households, advanced 68.3 trillion won over the year to 721.9 trillion won at the end of December. It was the biggest growth since 2015.

Credit loan went up 32.4 trillion won to 266 trillion won last year, logging the highest expansion since 2004.

The COVID-19 pandemic led households to secure credit loan from banks for living expenses.

The micro-business owners were hit hardest by the tightened social-distancing guidelines, in which brick-and-mortar businesses such as restaurants, coffee shops and cafes were allowed to open with restrictions. (1 U.S. dollar equals 1,097.6 won)

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