South Korea’s Foreign Debt Hits USD735.6B in Q2
(MENAFN) South Korea’s foreign debt surged for the second consecutive quarter, reaching $735.6 billion by the end of June, driven by sharp increases in both short- and long-term borrowing, Bank of Korea (BOK) data revealed on Wednesday.
The country’s external liabilities grew by $52.1 billion in the April–June period, following a $10.5 billion rise in the previous quarter.
Short-term foreign debt, defined as liabilities maturing within one year, jumped $17.7 billion to $167.1 billion in Q2. Long-term debt also saw a substantial increase, rising $34.4 billion to $568.5 billion.
As a result, the proportion of short-term debt relative to total foreign liabilities edged up 0.9 percentage points, hitting 22.7% by the end of June.
Meanwhile, the ratio of short-term debt to the country's foreign reserves climbed 4.3 percentage points to 40.7%, signaling growing pressure on South Korea’s external balance sheet.
Net external credit—calculated as total external credit minus foreign debt—fell by $10.7 billion, totaling $357.2 billion at quarter’s end.
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