Korean private debt has exceeded 900 trillion won for the first time in the country's history, equivalent to three times the government budget of 325 trillion. According to statistics released by the Bank of Korea, in the fourth quarter of 2011 the debt amounted to 913 trillion, up by 22 trillion on the third quarter and by 7,8% on the previous year.
Worrying signs emerged as consumers closed savings accounts and insurance policies. According to Kookmin Bank, the number of closed accounts nearly doubled from 57.922 in December 2010 to 96.698 last January. The Korean Insurers Association has revealed that around 500 people, either voluntarily or because they are no longer able to pay premiums, have canceled their life insurance policies in recent months.
Kim Dong-yeop of Mirae Asset commented that “in difficult times, consumers cut budgets by sacrificing savings, policies and education expenses. The trend is very clear in what is happening now."
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