Connect to share and comment
SEOUL, Sept. 22 (Yonhap) -- The ratio of South Korea's total debt to its economic output rose to a record high in the second quarter of this year as debt grew at a faster pace despite the slowing economy, central bank data showed Sunday.
The combined debt of households, companies and the government reached 3,739.4 trillion won (US$3.4 trillion) as of the end of June, according to the data compiled by the Bank of Korea.
The ratio of such debt against the country's gross domestic product (GDP), the broadest measure of economic performance, reached a record 289.8 percent, compared with 285.2 percent in the second quarter of 2009 at the height of the global financial turmoil.
The central and provincial governments' indebtedness nearly quadrupled to 517.9 trillion won in the second quarter of 2013, from the same period of 2003, according to the data.
The data showed financial debt held by companies jumped to 2,039.3 trillion won during the cited period, according to the data.
It also showed that debt held by households and non-profit organizations more than doubled to 1,182.2 trillion won in the same period.
The surge in the debt ratio comes as households excessively borrowed from banks and non-banking institutions to buy houses when the housing market was booming in 2005 and 2006.
Korea's household debt has been one of the main drags on Asia's fourth-largest economy because households' high indebtedness is feared to curb domestic demand and thus crimp economic growth.
Lim Hee-jeong, an analyst at Hyundai Research Institute, said it is a matter of concern that indebtedness of economic players is worsening amid dwindling demand and investment.
<All rights reserved by Yonhap News Agency>
Copyright Yonhap News Agency, 2014. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.