Soaring debt risk
Authorities need to prepare exit strategy
All economic players ― households, businesses and government ― have recorded a surge in their debt due to the COVID-19 pandemic. This is raising the need for an exit strategy to avoid a debt crisis before it is too late.
According to the Bank of Korea (BOK), outstanding bank loans extended to households reached 988.8 trillion won ($896 billion) as of Dec. 31, up 100 trillion won from the previous year. When loans from non-bank financial firms were included, the sum hit a record 1,682 trillion won last September, and is estimated to grow further to 1,700 trillion won by the end of 2020 when figures are in. Household debt has already emerged as a ticking time bomb.