The Moon Jae-in administration plans to keep the household debt to disposable income ratio to below 150 percent to tackle the worsening household debt problem. 

The ratio jumped from 133-point-one percent in 2012 to 151-point-one percent last September as household debt increased rapidly while income remained stagnant.

Professor Kim Sang-jo, who worked on economic policies for Moon’s election campaign, said on Monday the so-called 150 percent plan is not about reducing the absolute amount of household debt with a tighter loan policy, but rather keeping the growth rate of household debt under the growth rate of current income.

Kim explained the 150 percent ratio will not be directly imposed on financial firms, however, it will be used as a yardstick by the government to properly implement fiscal and monetary policies.