Go to contents

Debt Per Household Reached 31,380,000 Won

Posted December. 22, 2003 23:00,   


With the increase in household debt, the debt per household reached its highest point, exceeding 31 million won.

Moreover, household bankruptcy is expected to increase since the capability of households to pay off debt is showing a decreasing tendency.

According to “The trend of money flow in the third quarter (7th~9th month)” presented by the Bank of Korea (BOK), debt per household increased from 30.92 million won at the end of June to 31.38 million won at the end of September.

The debt per household has been showing a rising tendency, exceeding 30 million won in late 2002, reaching 30.69 million in late March, and 30.92 million in late June this year.

The debt, belonging to individuals (including small private enterprises and nonprofit organization) from three economic subjects--individuals, enterprises, and the government--increased by 5,500 billion won compared to the end of June, reaching 472,600 billion won in late September.

The increment of debt belonging to individuals in the third quarter jumped compared to that in the second quarter (4th~6th month) of 2,600 billion won.

In addition, financial assets belonging to individuals reached 976,900 billion won with the ratio of financial assets to debt reaching 2.07. This ratio has decreased from 2.44 in late 2001 to 2.08 in late March of this year. This indicates a weakening capability of individuals to pay off debt.

Cho Sung-kook, head of bureau of economic figures at BOK, said, “It is hard to make a perfect comparison due to the lack of data for evaluating individuals’ financial assets by the market price, but debt of individuals and households in Korea is heavy in terms of their capability compared to U.S.’ and Japan’s ratio of financial assets to debt of 3.45 3.97, respectively.”

Meanwhile, the total financial assets for every economic subject and the remainder of the debt amounted to 4,499,500 billion won and 1,275,200 billion won, respectively in late September. The amounts increased by 122,700 billion won and 56,900 billion, respectively, compared to the end of last year.

In addition, fund-raising of enterprises increased from 9,200 billion won in the second quarter to 12,800 billion won with an increase in demand for working funds despite the depression in equipment investment.

Joong-Hyun Park sanjuck@donga.com