One in three households see debt rise in second half

A survey found Tuesday that one in three households has seen a rise in its total debt in the latter half of this year, largely due to funding its living costs.

The survey, released by the Korea Chamber of Commerce and Industry, said 33 percent of the households located in the metropolitan area answered that their debts increased from July compared to the first half of this year. The survey was conducted on 300 households.

Among those who answered that their total debt has risen, more than four in 10 people said more money was used to fund their living expenses, while 22 percent borrowed money to purchase homes and 19.2 percent borrowed the sum to pay for their short-term and long-term rents, the survey said. Another 9.1 percent said they used the extra funding to buy cars, home appliances and furniture.

More than 68 percent of survey respondents said they have reduced spending recently, with high inflation the No. 1 reason for the decrease, it said.

About 28.5 percent saved money on dining and accommodation, followed by a drop in spending on fashion and beauty, and cultural events with 18.3 percent and 17.1 percent, respectively, according to the survey.

“Due to the global and domestic weakened economic conditions, people are making attempts to save costs on what is deemed to be unessential in their daily lives, such as money spent on dining out and leisure activities,” said a KCCI official. “It’s currently difficult to expect people to open up their wallets easily.”

The listed policy tasks, which must be practiced to enable people to spend more money that would eventually boost the economy, were stabilizing the market as well as the real estate market, creating more jobs and offering a steady interest rate, the survey said.

By Cho Ji-hyun (sharon@heraldcorp.com)