Life of Debt-Ridden Residents in South Korea: Daily Struggles and Financial Burdens
Surviving the South Korean Debt Race:Squid Game isn't just a TV show anymore—it's a real-life gamble for some! South Korea, a nation heralded for its economic success, is grappling with record-breaking household debt, particularly in the housing sector. As the hit series highlights the dangerous realities of debt, one wonders if the citizens would risk their lives for a large sum of money. One client simply admits, "If I had a mountain of debt, I'd be ready to do it." After all, the wealth disparity in South Korea is startling. A player observes, "The divide between the rich and the poor is immense. That, in my opinion, is the main issue in South Korea."
Living on the Debt Edge
This is the hidden side of South Korea's economic triumph—sky-high household debt. Seong Bae Jeon, a deliveryman in Seoul, works nights until the wee hours and slogs up to 14 hours daily, six days a week. It's an endless race. Earning around 2,000 euros per month, he's treading water in debt. Like many Koreans, his predicament is tied to housing. In an unusual global trend, one needs a substantial deposit even to rent an apartment in Korea.
Insight: The Q1 2025 report by Kostat (Statistics Korea) reveals that household debt reached a whopping 1,928.7 trillion won ($1.39 trillion), marking a significant increase in consumer borrowing[2][3]. Furthermore, housing mortgage loans, which account for roughly 60% of household loans, have seen substantial growth in recent months, contributing significantly to the overall surge in household debt[2].
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The Regulatory Battle
The government is introducing stricter debt service ratios to curb lending, with a 1.5 percentage point buffer added to current interest rates to assess borrowers' repayment capacity[5]. However, as the economy struggles with a slow growth rate, managing household debt has become a pressing concern for policymakers and consumers alike[3][5].
Insight: Investors are urged to concentrate on sectors less reliant on easy credit, such as essential retail, electric vehicle manufacturers, and banks with diverse portfolios[3].
The thrilling world of Squid Game might seem extreme, but for some, the harsh reality of debt seems just as daunting. While the show sparked global discussions on debt and societal issues, the question remains: How deep are the Koreans' financial trenches and at what point are they willing to resort to drastic measures to escape them?
The escalating household debt in South Korea, as highlighted by the Q1 2025 Kostat report reaching 1,928.7 trillion won ($1.39 trillion), has become a significant concern for both policymakers and ordinary citizens, particularly in the housing sector where mortgage loans account for a majority of household loans. Seong Bae Jeon, a deliveryman in Seoul, struggling to repay his debt and live within his means, exemplifies the harsh reality of debt that many Koreans face. Despite the government's efforts to introduce stricter debt service ratios to curb lending, the slow growth rate of the economy has made managing household debt a pressing concern.
