SEOUL — For the first time, the collective debt of South Korea’s government and households has exceeded the 3,000 trillion won mark, reflecting heightened economic pressures such as lower tax revenues and increased borrowing for real estate investments.
According to Yonhap News Agency, the national and household debt surged to a record 3,042 trillion won at the end of the second quarter. This figure represents around 127 percent of the country’s nominal GDP from last year, which was 2,401 trillion won. The national debt saw an increase of 30.4 trillion won over the previous quarter, reaching 1,146 trillion won, influenced by sluggish economic growth and continued shortfalls in tax revenue.
Household debt also reached a new peak at 1,896 trillion won, driven largely by a resurgence in housing transactions that spurred associated borrowing. The structure of this debt includes loans from banks and insurance companies, while the national debt primarily comprises government bonds, loans, and other financial obligations.
The overall rise in combined debt for the second quarter was 44 trillion won, an increase from the 20 trillion won seen in the first quarter. This represents the most significant quarterly jump since the third quarter of 2021, during the height of the COVID-19 pandemic.
Kim Kwang-suk, head of the economic research department at the Institute for Korean Economy and Industry, expressed concerns about the implications of these debt levels. “The rising trend of national and household debt could further constrain the recovery of domestic demand in the future,” he noted.