South Korea's Ministry of Trade, Industry and Energy
Seoul - QNA
Household credit in South Korea again hit a new record high in the fourth quarter, also expanding at record pace, as household debt surged on eased lending rules and rate cuts, data showed Thursday.
Household credit totaled 1,089 trillion won ($990 billion) as of end of December, up 29.8 trillion from a revised 1,059.2 trillion won posted three months earlier, according to the Bank of Korea (BOK).
Household credit refers to credit purchases and loans extended by financial institutions, including commercial lenders and mutual savings banks, according to South Korea's news agency Yonhap.
The fourth-quarter gain marks the sharpest quarterly growth since the BOK began compiling the data in the fourth quarter of 2004.
A spike in household debt pushed the country's already-sizable household credit to a new record.
Outstanding household loans reached 1,029.3 trillion won at the end of December, spiking 27.6 trillion won from the previous quarter and accounting for most of the quarterly gain in household credit.
The figures come on the heels of policy efforts aimed at spurring growth and property transactions in Asia's fourth-largest economy where recovery is losing steam.
Last year, the government introduced a set of stimulus, including the easing of loan-to-value and debt-to-income regulations.
Rate cuts by the central bank ensued with the BOK slashing the base rate by a quarter percentage point each in August and October last year to a record low of 2 percent.
Household loans extended by lenders shot up by 17.7 trillion won in the fourth quarter, accounting for nearly half of last year's 38.5 trillion won gain in such loans, according to the data.
The gain in household loans by banks tripled in 2014 to 38.5 trillion won, compared to 13.9 trillion won in the previous year.