Seoul, Nov 21 (IANS) High household debt and anticipated policy shifts under Donald Trump’s administration are among the key systemic risks to South Korea’s financial system, according to a central bank poll released Thursday.
The survey, conducted by the Bank of Korea among 78 financial and economic experts, revealed that 26.9% of respondents identified rising household debt and repayment burdens as the top concern.
Additionally, 20.5% of participants highlighted potential U.S. policy changes under Trump as a significant risk, while 9% pointed to the impact of major economies pursuing national interest-focused industrial policies, as reported by Yonhap news agency.
Experts also expressed concerns about weak domestic demand and challenges faced by self-employed individuals and small businesses, which could further strain the financial system.
In the third quarter of 2024, household credit surged to 1,913.8 trillion won ($1.37 trillion), marking the largest increase in three years, driven primarily by a sharp rise in mortgage loans.
This figure represents the highest quarterly total since 2002 when the Bank of Korea (BOK) began tracking such data.
Last month, the BOK cut its benchmark interest rate by 0.25 percentage points to 3.25%, marking its first monetary policy shift in over three years amid easing inflation and weak domestic demand.
However, officials remain cautious about further monetary easing due to concerns over rising home prices in Seoul and nearby areas, as well as increasing household debt levels.
South Korean stocks rebounded late Thursday morning, driven by gains in technology and battery sectors following Nvidia’s third-quarter earnings report.
After opening slightly lower, the benchmark Korea Composite Stock Price Index climbed 6 points, or 0.24%, to reach 2,488.29 by 11:20 a.m.
Meanwhile, Nvidia announced third-quarter earnings that exceeded expectations for both sales and profits. However, its shares dipped in extended trading amid concerns over a potential slowdown in business performance.
