Global credit rating agency Moody’s Investors Service has assessed that rising household debt will have a negative impact on South Korea’s sovereign credit rating.
 
Moody’s said on Monday that downside risks to growth have increased due to reduced income from rising household debt and possible rate hikes.
 
It said that growth of household debt accelerated since 2014 with the increase of mortgage loans, but there was no corresponding increase in the value of property held by households.
 
Moody’s noted that 60 percent of mortgages are floating-rate loans, which exposes households to interest rate shocks.
 
The Bank of Korea said last week that the country’s household debt hit an all-time high of one-point-three quadrillion won last December, up 141 trillion won, or eleven-point-seven percent, from the previous year.