Household debts in South Korea grow faster than income

Household debts in South Korea grew faster than income in the past year, boosting concerns over debt- servicing capabilities, data showed Tuesday. Average debts owed by households reached 58.18 million won ( some 55,000 U.S. dollars) as of the end of March, up 6.8 percent from a year earlier, according to the joint report by Bank of Korea, Financial Supervisory Service and Statistics Korea. It was faster than 5.7 percent in last year's income growth, fueling worries that the country's households felt more burdened for their debt repayment amid slower income expansion. The rate of financial debts to disposable income increased 2.8 percentage points on-year to 108.8 percent at the end of March, and the ratio of indebted households took up 66.9 percent of the total as of end-March, up 1.8 percentage points from a year ago. Debts among low-income earners rose sharply, raising possibilities for a hike in failure of household debts. Debts among those in the lowest 20 percent income bracket surged 24.6 percent over the cited period, with those for people in the 20-40 percent income bracket jumping 16.3 percent. Temporary workers and those hired on a daily basis saw their debts grow 16.9 percent in the period, while debts among regular workers edged up 1.7 percent. Weighed down by growing debts, household expenditure averaged 23.07 million won at the end of March, up 0.2 percent from a year earlier.