via koreatimes.co.kr:
Korea’s household debt-to-gross domestic product (GDP) ratio was the highest among the world’s 34 major economies in the first three months of this year, data showed Monday. This has raised concerns that banks and other financial firms may face higher default rates amid higher interest rates and deepening economic warning signs.
According to the latest Global Debt report by the Institute of International Finance (IIF) on Monday, the country’s household debt-to-GDP ratio stood at 102.2 percent, topping the list, followed by Hong Kong at 95.1 percent, Thailand at 85.7 percent, U.K. at 81.6 percent and the U.S. at 73 percent. Malaysia, Japan, China, the EU and Singapore also made the top 10 list of countries with the highest indebted households.
Just like last year, Korea is the only country among the 34 surveyed countries of the report that has a level of household debt that exceeded the size of its own GDP.
Still, when compared to the previous year, Korea’s household debt-to-GDP ratio has fallen by 3.3 percentage points to 102.2 percent, as of the first quarter, from 105.5 percent in last year’s first quarter. This decline is ascribed to deleveraging ― a debtors’ attempt to decrease the total financial leverage ― and asset price falls amid high-interest rates.
Korea’s corporate debt-to-GDP ratio ― which excludes financial sector debt ― stood at 118.4 percent, as of the first quarter of this year. It is the world’s fourth-highest level, following Hong Kong at 269 percent, China at 163.7 percent and Singapore at 126 percent.