[Economic Outlook] How Much Did Household Finances Worsen in Q2... 'Household Trends & Credit' Announcement

Due to the monsoon season, vegetable prices are rising sharply. On the 13th, citizens were shopping at a large supermarket in downtown Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Joo Sang-don] This week, indicators that can gauge how much household finances have worsened since the outbreak of the novel coronavirus infection (COVID-19) will be announced one after another.

First, Statistics Korea will release the household trend report for the second quarter on the 20th. This indicator examines the income and expenditure of our citizens over a certain period. In the case of the second quarter, economic conditions were poor enough that the Gross Domestic Product (GDP) decreased by 3.3% compared to the previous quarter due to the impact of COVID-19. Negative repercussions from this are inevitable.

The Bank of Korea will announce the results of the 'Household Credit in the Second Quarter' survey on the same day. In the first quarter (as of the end of March), the total household debt (credit) from loans and card usage reached 1,611 trillion won, setting a record high. In particular, mortgage loans increased sharply by more than 15 trillion won during the first quarter. This was the result of a significant increase in funds flowing into real estate, linked to government real estate policies. The scale of household credit for the second quarter is also expected to easily break the quarterly record high. Since April, demand for housing funds has increased due to rising housing sales and jeonse prices, and household loans have risen sharply due to economic difficulties caused by COVID-19. According to the 'Financial Market Trends in July' announced by the Bank of Korea on the 12th, as of the end of July, the outstanding balance of bank household loans was 936.5 trillion won, an increase of 7.6 trillion won compared to the end of June.

On the 19th, the 3rd Real Estate Market Inspection Meeting of related ministers will be held. Chaired by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, this meeting will be attended by Minister of Land, Infrastructure and Transport Kim Hyun-mi, Financial Services Commission Chairman Eun Sung-soo, Blue House Chief Economic Secretary Lee Ho-seung, National Tax Service Commissioner Kim Hyun-joon, National Police Agency Commissioner General Kim Chang-ryong, Financial Supervisory Service Governor Yoon Seok-heon, and officials from the Ministry of the Interior and Safety and Seoul City. They will check the progress of follow-up measures for real estate supply and demand policies and discuss ways to block disruptive activities in the real estate market.

This content was produced with the assistance of AI translation services.