https://www.hani.co.kr/arti/economy/economy_general/1175328.html
소비·경기 얼어붙어 새해 더 걱정…자영업·건설·부동산 ‘금융불안’ 뇌관
12·3 내란사태로 인한 정국 혼란이 장기화돼 민간소비 및 부동산 경기가 지금보다 더 얼어붙을 경우 이미 9년 만에 최고치에 도달한 자영업자 연체율이 더 치솟을거란 우려가 나온다. 29일 한국
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Introduction
As South Korea grapples with the aftermath of the December 3 coup attempt and the ensuing political upheaval, the nation's economy faces mounting challenges. The prolonged instability has led to a worrisome decline in consumer spending and real estate market activity, raising concerns about the impact on small businesses and the overall financial health of the country.
Soaring Delinquency Rates Among Small Businesses
One of the most pressing issues is the rising delinquency rates among small business owners. According to data provided by the Bank of Korea to lawmakers, the delinquency rate for loans to self-employed individuals reached a nine-year high of 1.70% in the third quarter of 2024. This marks the highest level since the first quarter of 2015 when the rate stood at 2.05%.
The total outstanding loans to self-employed individuals amounted to a staggering 1,064.4 trillion won ($852 billion) as of the end of September, the highest since the central bank began compiling related data in 2012. This figure represents an increase of 4.3 trillion won from the end of June, highlighting the growing financial burden on small businesses.
Concerns Over Multiple Borrowers and Delinquent Loans
Among the self-employed borrowers, those with loans from three or more financial institutions held a total of 754.4 trillion won in outstanding debt, with an average of 430 million won per person. The data also revealed that the delinquent loans (defined as loans with principal or interest payments overdue by one month or more) owed by self-employed individuals reached a record high of 18.1 trillion won at the end of September, a staggering increase of 2.2 trillion won from the end of June.
The worsening financial situation for small businesses is further exacerbated by the decline in consumer sentiment. The Bank of Korea's recent survey showed that the consumer sentiment index plummeted by 12.3 points in December to 88.4, marking the largest drop since March 2020 when the index fell by 18.3 points.
Deteriorating Delinquency Rates in Construction and Real Estate Loans
The construction and real estate sectors are also facing increasing financial strain, with delinquency rates on related loans deteriorating, particularly in the non-banking financial sector. According to data provided by the Bank of Korea, the delinquency rate for construction loans in the non-banking sector reached 8.94% in the third quarter of 2024, while the rate for real estate loans stood at 6.85%. These figures represent the highest levels since related data collection began in 2015.
The total outstanding real estate loans across all financial sectors amounted to 512.3 trillion won in the third quarter of 2024, an increase of 19.3 trillion won from the previous year. The non-banking sector, which includes savings banks, mutual finance, insurance companies, and credit-specialized financial companies, held 187.1 trillion won of this total.
Conclusion
The ongoing political turmoil in South Korea, triggered by the December 3 coup attempt, has cast a shadow over the nation's economy. As consumer spending and real estate market activity continue to decline, small businesses and the construction and real estate sectors are bearing the brunt of the financial fallout.
With delinquency rates soaring to alarming levels, policymakers and financial authorities must take swift and decisive action to support struggling businesses and prevent further deterioration of the economy. Failure to address these issues could lead to a domino effect, jeopardizing the stability of the financial system and the livelihoods of countless South Koreans.
As the nation navigates this tumultuous period, it is crucial for leaders to prioritize economic recovery and implement measures to restore consumer confidence and stimulate growth. Only through concerted efforts and a commitment to financial stability can South Korea weather this storm and emerge stronger on the other side.
