SOUTH Korea has the highest household debt-to-GDP ratio among 36 major global economies in the first quarter of this year, with 104.3%.

The East Asian nation is followed by Lebanon with 97.8%, Hong Kong (95.3%), Thailand (89.7%) and Britain (83.9%), according Institute of International Finance (IIF) data, as reported by Yonhap.

South Korea is the only country whose household debt exceeds its GDP among the 36 countries, which included China, Japan, the United States as well as European Union nations.

Its outstanding household lending stands at 1.75 trillion won (RM6.1 billion) at the end of March, down 1.5 trillion won from the end of December, according to Bank of Korea data.

The debt-to-GDP ratios have been declining in global economies mainly due to the rising interest rates.

South Korea’s ratio fell 0.7 percentage points from 105% in the same quarter of last year, showed IIF data.

But its on-year reduction rate is far smaller than the 7.2% in Britain, 4.7% in the US, 4.6% in Japan and 2.9% in the EU.

The central bank recently said rising interest rates can turn the country’s existing household loans into non-performing ones and subsequently weigh on consumption. – Bernama, June 6, 2022.