Six out of 10 South Koreans in debt, owing near $65,000

2017.12.21 16:31:31 | 2017.12.21 16:34:30

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Six out of 10 South Korean household were in debt, each owing over 70 million won ($64,767) amid sharp debt growth in the age group of under 30 to underscore the gravity of the country’s two major economic problems - dangerous household debt pile and record-high youth unemployment.

According to 2017 household financial data released by Statistics Korea, Bank of Korea and Financial Supervisory Service on Thursday, a household on average was 70.2 million won in debt as of the end of March this year, up 4.5 percent from 67.19 million won a year ago.

Financial debt took up the lion’s share of 49.98 million won and rent deposit obligations the rest. A Korean family on average held 40.56 million in mortgage-backed loans and 7.76 million won in credit-based loans. Credit card-serviced debt averaged 560,000 won per household.

Indebted household made up 63.2 percent of total population. About 18.4 percent owed 10 to 30 million won, 17.5 percent less than 10 million won, 13.3 percent 110 to 200 million won, and 8.3 percent more than 300 million won.

Those in their 40s owed the largest amount of debt reaching 85.33 million won, followed by 50s with 85.24 million won, 30s 68.72 million won, 60s or more 51.65 million won, and under-30 23.85 million won.

But growth was most distinct among the younger generation. Debt increased by 41.9 percent in the age group of 30 and under. Real unemployment rate for the age group in November hit 21.4 percent. Debt for 30s also jumped 16.1 percent versus 1.8 percent to 5.1 percent pace in the elder group.

In the job category, debt of self-employed individuals added by 3.7 percent to 100.87 million won on average, salaried workers by 5.1 percent to 80.62 million won, and those on irregular payroll by 4.4 percent to 28.15 million won.

The disposable income ratio against debt showed that Koreans were spending a quarter of their income to finance their debt.

By Kim In-oh and Lee Ha-yeon

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