South Korea’s economy is at the level of national bankruptcy…The desperate reality of the “Great Crisis Coming in March

The South Korean economy may collapse in March.

While the public debt is comfortable, the household debt has exceeded 100% of GDP. The main reason for this is housing prices, which have been soaring in Seoul and other major metropolitan areas over the past few years. As of August 2009, household debt stood at 1806 trillion won (about 172 trillion yen), a desperate level that could bankrupt the Korean economy. As of August 2009, household debt stood at 1806 trillion won (about 172 trillion yen), a desperate level that could bankrupt the South Korean economy.

And this March, ……. There is a dangerous situation ahead that could deal a fatal blow to the huge mass of household debt.

In April 2008, in response to the spread of coronary infections, the South Korean government issued financial support measures for small and medium-sized enterprises and sole proprietors, consisting of extending the maturity of loans from financial institutions and postponing the repayment of principal and interest. Kim Hyun, the Tokyo bureau chief of the Korea Financial Daily, explains.

Kim Hyun, the Tokyo bureau chief of the Korea Financial Daily, explains: “South Korea had early on implemented a stricter social distance than Japan’s emergency declaration. As a result, small and medium-sized enterprises and sole proprietors who rely on domestic demand will be hit hard. On the other hand, cash transfers, which are Japan’s ‘support money for sustainability’ and ‘cooperation money’ for restaurants, are extremely small, about several hundred thousand yen per year. What we have come up with as an alternative is the above financial measure.

Even with the reprieve, the debt is still snowballing: ……

The financial support measures, originally scheduled for six months, have been extended twice and will end in March this year. It is possible that the ruling government, which is struggling to win the next presidential election, will order a further extension, but the financial authorities are extremely reluctant to do so. However, the financial authorities are extremely reluctant to do so because the longer the period, the more debt the borrowers will have to repay and the greater the risk of default. Mr. Kim continues.

In the past, Japan has extended loan periods and postponed principal repayments, but it is rare for the interest rate to be postponed as well. Even if the loan is at a simple interest rate, the debt will snowball.

As of the end of July 2009, the outstanding debt of the borrowers covered by this measure amounted to 120.7 trillion won (about 11 trillion yen).

Initially, the South Korean government tried to normalize business among small and medium-sized enterprises and sole proprietors by increasing vaccination rates and easing social resistance. The end of the financial support measures in March was supposed to be a soft landing, but the renewed spread of the Omicron virus has thrown the plan into disarray.

The financial support measures are for small and medium-sized enterprises and sole proprietors. The financial support measures are for small and medium-sized enterprises and sole proprietors, and are separate from the household debt that the government is concerned about. In reality, however, the two are closely linked.

For sole proprietors, there is a blurry distinction between business funds borrowed from financial institutions and funds cashed out with cards in their personal names. This is especially true when the business is in trouble.

It is not uncommon for small and medium-sized business owners to be ‘big spenders’ in terms of household debt, as they inherently have strong credit standing with local financial institutions. However, once a business takes a turn for the worse, a yellow light will go on for its repayment. And if it’s a small business, it’s not uncommon for the owner to take out a loan on personal credit to protect the business and employment. It goes without saying that the worsening business conditions of small and medium-sized enterprises will have an impact on the financial condition of their employees.

In South Korea, the presidential election is now in full swing. At the same time, the South Korean economy is in a critical situation, treading on thin ice.