SEOUL, May 20 (Xinhua) -- South Korea's corporate debt surged for the past six years on the back of strong demand from the real estate sector, central bank data showed Monday.
Corporate debt amounted to 2,734 trillion won (2 trillion U.S. dollars) at the end of 2023, up 1,036 trillion won (762 billion dollars) from six years earlier, the Bank of Korea (BOK) said.
It represented an annual average growth rate of 8.3 percent, topping an annual expansion of 3.4 percent in nominal gross domestic product (GDP).
The ratio of corporate debt to the nominal GDP swelled to 122.3 percent at the end of 2023 from 92.5 percent at the end of 2017.
The sharp increase was mainly attributed to the booming real estate market, which boosted debt demand from the real estate sector.
The COVID-19 pandemic also increased debt demand from micro-business owners and small merchants.
Demand has been stronger since 2020 for operating and facility funds from industrial companies, caused by the country's economic slowdown.
In 2023 alone, corporate debt grew 4.5 percent on a yearly basis as the faltering housing market and the higher interest rates reduced debt demand. ■
