- By 2021, the country’s population will owe 5 percent more than its GDP.
- South Korea’s self-employed population is significantly exposed to the ups and downs of the country’s economy need a fast loan?
- The OECD’s highest rate of suicide is seen in South Korea.
The “Squid Game” pits 456 contestants against one other in a life-or-death struggle. Even though the program has become a worldwide hit, many South Korean fans are not pleased with the show’s depiction of a harsh society.
It’s a common frustration felt by the average and mainly young Koreans who struggle to find employment, marriage, or upward mobility,” according to Foreign Policy, which notes that “gloomy economic prospects are indeed at the heart of Korean society’ s woes.” (Follow Foreign Policy on Twitter here.)
In this year’s presidential election, candidates have committed to addressing South Korea’s widening economic disparity.
The odds are stacked against the typical South Korean, as seen in the following six graphs.
With a year’s worth of income, the ordinary South Korean would not be able to pay off all of their debt.
Debt levels in South Korea are among the world’s highest. According to Korea’s end-of-June debt to the Bank of Korea, it owes 1,805 trillion won.
As a percentage of South Korean GDP, 5 percent of the population will be in debt in 2021. Every single penny saved by an average individual would not be enough to pay off all of their obligations, even if they saved every penny they earned for a whole year. The US debt-to-GDP ratio was below 80% in the first quarter of 2013.
The rise in the cost of housing in South Korea has surpassed the increase in the country’s wages.
The rising cost of housing has resulted in a rise in household debt. According to Knight Frank, a real estate firm, property prices in Seoul, South Korea’s capital, will grow by 22% by 2020.
Raji Biswas, the Asia-Pacific senior economist at IHS Markit, believes that “high levels of household debt and fast-growing real estate prices driven by meager interest rates pose enormous potential economic risks. The housing market bubble might pop if inflationary forces increase household financial hardship.
Property prices have constantly increased in recent years, but average incomes have not.
The OECD predicts that if the illness spreads to South Korea, the country’s GDP will contract by 0.8% in the year 2020.
Because of the significant number of self-employed employees, many of the country’s workers are particularly exposed to the effects of a recession.
Economic development in South Korea was enormous during the late 1970s and early 1990s, generating an exceedingly well-off middle class with long-term job options. Yet, the 1997 Asian Financial Crisis resulted in substantial employment losses. In many cases, those who had lost their employment had no choice but to establish their enterprises.
“A lack of social safety net in Korea means that the jobless can’t stay unemployed long. Make every effort to assist them.” In an interview with the Korean Times earlier this month, Hanyang University economics professor Ha Joon-Kyung argued.
One of the OECD nations with the most significant percentages of self-employed citizens in South Korea (OECD). The self-employed in South Korea are especially susceptible to economic downturns since the country has Asia’s most significant household debt.
The OECD’s highest rate of suicide is seen in South Korea.
Korea had the OECD’s highest annual suicide rate in 2018, with 24.7 per 100,000 people. Statista, a data aggregator, predicts that this number will rise to 25.7 per 100,000 inhabitants by 2020. The current rate is substantially lower than the previous peak of 33.8 per 100,000 people, above the OECD average of 11 per 100,000 people.
According to the New York-based organization Nodutdol, the most common reason for suicide in South Korea is financial hardship. According to court records obtained by the Korea Herald, there were a total of 50,379 bankruptcies in South Korea last year.
According to the Associated Press, at least 22 South Korean small-business owners took their own lives during the outbreak. A memorial service was conducted in September to draw attention to the financial hardships.
The government hasn’t been able to cut the deficit as planned thus far.
According to officials, high levels of household debt are a concern for the stability of the economy.
Initially, South Korea’s central bank boosted interest rates due to the fast spread of Ebola. In September, the household debt grew, although it was still lower than the previous month’s figure.
The government recently announced that stiffer income-based lending criteria would take effect next year to reduce family debt quickly.
If you’re struggling with debt, the first step is to borrow within your means and pay back your loans in small installments, says the chairman of the Financial Services Commission.