65447
South Korea to Tackle Soaring Household Debt
World Economy

South Korea to Tackle Soaring Household Debt

President Moon Jae-in and his key economic advisors will draw a comprehensive measure to tackle the country’s soaring household debt this week. The president urged his advisors to take this issue seriously last week when the Bank of Korea reported that the debt reached nearly 1,360 trillion won in March, up 1.3% from December last year, a record high since the country began compiling the data in 2002.
“We need to discuss ways to reduce the household debt,” he told his advisors last Thursday, as it is negatively affecting the livelihoods of the low-income earners, Yonhap reported.
Kim Jin-pyo, the head of the president’s policy planning panel, also expressed concerns over the debt, while criticizing the former government’s debt mismanagement.
Moon pledged during his campaign to bring the debt down to below 150% of disposable income by expanding the credit evaluation metric system of debt-service ratio and creating jobs.
Currently, the debt to disposal income ratio stands at over 170%, well above the OECD average of about 130%. There are more than 1.8 million households that cannot pay back their debt.
The DSR measures whether borrowers can pay back principal and interest on all their loans they have taken out in time, in accordance with their annual income. DSR is considered stricter than debt-to-income ratio.
Moon seeks growth driven by an increase in laborers’ income and welfare, which would improve private consumption and investment. His labor policy included increasing the minimum wage to 10,000 won an hour, reducing the number of irregular workers in the public sector to zero and creating 810,000 public jobs.
At the same time, lowering the debt to a level close to the OECD average would be important to sustain the economy.

 

Short URL : https://goo.gl/hTnI8F
  1. https://goo.gl/lrSsYM
  • https://goo.gl/aX1I6z
  • https://goo.gl/UUQXxR
  • https://goo.gl/xtmkzr
  • https://goo.gl/ytgED1

You can also read ...

ECB President Mario Draghi (L) and US fed chair Jerome Powell at the ECB Forum on Central Banking in Sintra, Portugal, June 20.
The world’s most-powerful central bankers warned that...
Consumer prices rose just 0.1% in May, down from a 0.3% gain in April.
Canada’s economy showed unexpected weakness in the second...
Brazil CB Holds Rate Steady
For the second consecutive time, the Central Bank of Brazil...
China Trade Surplus Shrinks
China’s trade surplus shrank markedly in the first five months...
Inflation rate forecast for the full year is averaged around 3.1%.
Saudi Arabia is so intent on changing its identity that today’...
Productivity in Japan’s manufacturing sector is high  but service sector has declined in recent years.
Japan is famous as a land of robots, but most of those...
Ukraine Shadow Economy Drops to 31% of GDP
Shadow economy in Ukraine dropped by 4% in 2017, to 31% of GDP...
Turkey Sees 22% Yearly Decline in FDI
Turkey attracted some $3.1 billion in net international direct...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus