Households are spending a record portion of their earnings to repay debts as people borrow more and more to finance increasingly expensive homes or stock speculation.
Korea’s household debt service ratio (DSR) stood at 12.6 percent in the second quarter of last year, according to the Bank for International Settlements on Tuesday.
The DSR is the proportion of disposable income that borrowers need to spend repaying principal and interest on their loans.
Korea’s DSR has been setting new record highs every three months since the fourth quarter of 2017.
The growth rate has increased since President Moon Jae-in took office in 2017. Only Korea and Norway’s rose more than one percentage point among 17 countries that compile such data. Most others’ declined.
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