SEOUL May 27 South Korea's annual household
credit growth reached its highest in two years during the
January-March period, central bank data showed on Tuesday, but
the growth was mainly attributed to a decline in loans in the
first quarter of 2013.
Household credit at the end of March, including loans and
other credit owed by South Korean households, was up 6.4 percent
year-on-year as credit rose 3.4 trillion won to 1,024.8 trillion
won ($1.00 trillion), the Bank of Korea's preliminary data
It was up from a 6.0 percent gain three months prior and the
quickest rise since a 7.1 percent incline seen in the first
quarter of 2012. Household credit fell 0.9 trillion won in the
first quarter of 2013, resulting in the bump seen in
January-March this year.
A central bank official said loans taken out in the first
quarter are usually modest, a result of year-end holiday bonuses
and fewer housing transactions because of cold weather.
Household borrowing during the January-March period in 2013
was especially low due to the expiry of tax cuts at end-2012
that resulted in a surge of borrowing during the fourth quarter
of 2012, the official said.
Loans owed to financial institutions gained 6.4 percent
compared from a year ago during the first quarter of the year to
967.6 trillion won. Purchases on credit, including credit card
transactions, gained 6.2 percent on a yearly basis to 57.2
trillion won, according to the quarterly data.
The South Korea government expects domestic consumption to
contribute more to economic growth in Asia's fourth-largest
economy this year, but recovery in spending is still wobbly as
consumer sentiment fell to an 8-month low in May.
The household credit growth estimates are subject to
revision, and revised numbers are published by the Bank of Korea
in the following quarter.
($1 = 1023.8500 Korean Won)
(Reporting by Christine Kim; Editing by Eric Meijer)