Household credit recovery in South Korea in the second quarter of 2023

Central bank data showed on Tuesday that household credit in South Korea recorded the first recovery in three quarters due to high demand for mortgage loans.
Household credit, which refers to debt owed by households to banks and other lenders as well as purchases on credit, stood at 1,862.8 trillion won (1.4 trillion U.S. dollars) at the end of June, up 9.5 trillion won (7.1 billion dollars) from three months earlier, according to the Bank of Korea (BOK).
Household credit declined in the fourth quarter of last year and in the first quarter of this year due to rising interest rates, but turned around in the second quarter thanks to the supply of government-backed mortgage loans to support the struggling housing market.
The central bank had left its benchmark interest rate unchanged at 3.50 percent since January, after raising it by 3.0 percentage points over the past year and a half.
Excluding credit purchases, household debt added 10.1 trillion won (7.6 billion dollars) compared to three months earlier to 1,748.9 trillion won (1.3 trillion dollars) at the end of June.
Household mortgage loans increased by 14.1 trillion won (10.5 billion dollars) during the April-June quarter, but other loans such as credit loans decreased by 4.0 trillion won (2.9 billion dollars).
Credit purchases decreased by 600 billion won (448.5 million dollars) in the said quarter, and continued to decline for the second consecutive quarter.