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South Korea Household Debt Reaches Record High in Q1
(MENAFN) South Korea's household credit reached unprecedented levels during the first quarter, driven by surging mortgage loan demand, central bank statistics disclosed Tuesday.
Household credit, encompassing debts owed by households to banks and additional lenders plus credit purchases, totaled 1,993.1 trillion won (approximately 1.33 trillion U.S. dollars) at March's conclusion, climbing 14 trillion won from three months prior, according to the Bank of Korea (BOK).
The figure represents the highest amount since data compilation commenced in 2002, sustaining upward trajectory for an eighth consecutive quarter beginning from the second quarter of 2024.
Record household credit resulted from robust home-backed loan demand across the nation.
The BOK maintained its benchmark interest rate unchanged at 2.50 percent following 25 basis point reductions implemented in February and May 2025, and October and November 2024.
Excluding credit purchases, household debt expanded 12.9 trillion won from the previous quarter, reaching 1,865.8 trillion won at March's end.
Mortgage loans to households surged 8.1 trillion won during the January-March quarter, accelerating beyond the 7.2 trillion won expansion recorded in the preceding quarter.
Additional household loans, including credit loans, swelled 4.8 trillion won during the reporting period.
Credit purchases contributed 1.1 trillion won in the cited quarter.
The escalating household debt burden raises concerns among policymakers regarding financial stability as South Korean consumers shoulder increasing leverage amid persistently elevated property prices throughout major metropolitan areas.
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