6 charts that show the tough reality of life in South Korea, where household debt is among the highest in the world and where house prices in the capital rose by 22% last year
- In 2021, the total amount of
debtthat South Koreans ran up exceeded the country's GDP by 5%.
- About one in four South Koreans is self-employed, making them vulnerable to economic downturns.
In the South Korean Netflix hit "
"At the heart of the show's dark story is the frustration felt by the average Korean, and particularly Korean youth, who struggle to find employment, marriage, or upward mobility - proving that grim economic prospects are indeed at the center of Korean society's woes," the State Department reported in a diplomatic cable, per Foreign Policy.
Now, with the next South Korean presidential elections coming up in March, presidential hopefuls are pledging to even out economic inequality in the country.
We've put together six charts that show just how badly the numbers are stacked against the average South Korean.
The average South Korean couldn't pay off all their debt even if they saved every cent for a year
In 2021, the total amount of debt that South Koreans ran up exceeded the country's GDP by 5%. This means that even if a person saved every dollar they earned for an entire year, they would still be unable to pay off what they owed. The US, for comparison, has a much lower debt-to-GDP ratio, which was below 80% in the first quarter of the year.
South Korea's household debt levels have been steadily climbing since the 2000s:
Property price gains in South Korea have outpaced wage gains
Soaring household debt levels are partially tied to soaring property prices. In particular, real-estate prices in the capital city Seoul - where about half the population lives - saw a spike of 22% in 2020, real-estate consultancy Knight Frank estimates.
"High levels of household debt and rapidly rising real estate prices driven by very low interest rates create significant potential economic risks," Raji Biswas, chief economist for IHS Markit's Asia-Pacific, told Insider. "A key concern is that a significant increase in interest rates due to rising inflation pressures could result in rising financial stress on households, as well as potentially triggering the potential bursting of a property sector bubble."
While prices of newly built and existing homes have been rising relentlessly over the years, average wages have not climbed as steeply in the same period.
The average wage in South Korea fell by 0.8% in 2020 amid the pandemic, according to Organization for Economic Cooperation and Development (OECD) data.
South Korea has a high-self employment rate, which means many workers are vulnerable to economic downturns
"As Korea's social safety net is not strong enough yet, the unemployed cannot remain jobless for long. They must do whatever they can," Ha Joon-kyung, a professor in the Department of Economics at Hanyang University, explained to the Korea Times earlier this month.
As the chart below shows, South Korea ranks at the very bottom of OECD countries when it comes to public spending, with only Turkey, Chile, and Mexico devoting less of their respective GDPs to social causes in 2019.
Today, South Korea's self-employment rate is one of the highest among OECD nations. The self-employed are particularly vulnerable to economic downturns, and using personal borrowings to fund business needs is part of the reason why South Korea's household debt level is the highest in Asia.
South Korea has the highest suicide rate among all OECD countries
In 2018, Korea had the highest
The top reason for suicide among South Koreans is financial stress, according to Nodutdol, a New York-based organization of diasporic South Koreans. Last year, South Korea's personal bankruptcies hit a five-year high of 50,379, court filings show, per the Korea Herald.
In September, a memorial was held for at least 22 small-business owners in South Korea who died by suicide during the pandemic, highlighting the financial stress faced by the self-employed during this time, the UPI reported.
The government has had little success curbing debt
The day of reckoning may have come, as authorities are concerned about high household debt levels and risk to the economy.
In August, South Korea's central bank was the first Asian economy to raise benchmark interest rates - a significant move since the pandemic is ongoing. But household debt levels still pushed higher in September from a month earlier.
Recently, authorities said they will implement stricter income-based lending rules going into effect next year to rein in household debt earlier than planned, reported the Korea Herald.
"Borrowing within your means and paying your
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