The delinquency ratio on South Korea’s household loans hit the highest level in five-and-a-half years at end-May, data showed on Thursday, underscoring growing concerns about the country’s heavy consumer debts even as the broader economy slows.
The ratio of household loans with principal payments overdue for a day or more rose to a provisional 0.97 percent at the end of May from 0.89 percent a month earlier, data from the Financial Supervisory Service showed.
It was the highest delinquency ratio for such loans seen since the end of October 2006, when the ratio stood at 1.07 percent, an official at the financial regulatory agency said.
Investors and policymakers have expressed concerns about the heavy debt carried by South Korean households, which rank among the most heavily leveraged in the world in terms of their debt amount compared to their disposable income.
The government has imposed a series of mostly modest measures since last year to keep the household debt growth from outpacing the speed of overall economic growth.
Meanwhile, the ratio of overdue bank loans by companies out of the total rose to 1.71 percent at the end of May from 1.50 percent a month before, the data showed. It hit the highest since the end of November last year.