SEOUL: At least one out of 10 urban South Korean households experienced overdue debt interest payments in the past half year, the central bank survey said on Sunday as the country grapples with heavy household debt.
The Bank of Korea said in a statement that 13.0 percent of households polled late last year had a case of being behind in debt interest payments over the past six months. Nearly half of them cited decreased incomes as the reason.
A total of 10.3 percent of respondents experienced a failure in debt principal payments in the past six months, and many of them, 43.7 percent of the total, pointed a failure to save enough for being in arrears.
The Bank of Korea surveyed 2,009 urban households nationwide between November 22 and December 24, 2010.
At least six out of 10 of the urban households thought current property price levels were high, but 42.5 percent of the total respondents expected real estate prices to go up further, double those forecasting a drop in property prices.
About a quarter of those surveyed singled out food purchases as the biggest component of their expenditure.
A large majority of households, 93.5 percent, believed the price growth rate of late was high and policymakers both at the central bank and the government needed to place priority on keeping overall and property prices under control.
Household debt, totalling 795 trillion won ($735 billion) at the end of last year, stand at nearly 1.5 times annual disposable income, second only to Britain among OECD member countries.
On Friday, President Lee Myung-bak named one of his closest aides and a former academic as a new finance minister in a cabinet reshuffle that signals a shift from pro-big business to a more populist government policy.
The Bank of Korea is expected to lift interest rates by 25 basis points to 3.25 percent at its policy review on May 13 after annual consumer inflation exceeded the top end of its target band of 2-4 percent for four months in a row.
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