Final yr, each earnings and belongings of Korean residents elevated, however distribution indicators displaying inequality between courses truly worsened. Specifically, rental deposit debt surged by 10% on account of rising jeonse costs, recording the biggest enhance in historical past.
In line with the “2025 Family Finance and Welfare Survey Outcomes” introduced by the Korea Information Company on Dec. 4, the common family debt in Korea as of the tip of March 2025 was 95.34 million received, a 4.4% enhance from the earlier yr (91.28 million received). The primary perpetrator behind the debt enhance was jeonse costs. Whereas monetary debt solely elevated by 2.4% to 67.95 million received, rental deposits surged by 10.0% to 27.39 million received. This represents the biggest enhance since associated statistics started being compiled in 2012. The surge occurred as jeonse costs rose considerably, rising the quantity of deposits that landlords should return to tenants. The proportion of rental deposits in complete debt additionally expanded to twenty-eight.7%.
Common family belongings elevated by 4.9% year-on-year to 566.78 million received. The rise in belongings was pushed by actual belongings corresponding to actual property. Actual belongings elevated by 5.8% to 429.88 million received, driving general asset progress. Accordingly, the proportion of actual belongings in complete belongings expanded to 75.8%, displaying that the ‘actual property focus’ phenomenon in asset markets persists. Concerning this, the Ministry of Economic system and Finance evaluated that “whereas debt elevated by 4.4%, belongings elevated by a bigger margin (4.9%), leading to a 5.0% enhance in households’ web belongings,” and “general family monetary soundness improved because the debt-to-asset ratio decreased.”
Common family earnings elevated by 3.4% year-on-year to 74.27 million received. Because of favorable employment market circumstances, earned earnings (2.4%) and enterprise earnings (2.1%) elevated, whereas property earnings (9.8%) and public switch earnings (7.6%) additionally elevated considerably. Though earnings elevated throughout all earnings quintiles, distribution indicators confirmed crimson flags.
The Gini coefficient, which signifies earnings inequality, rose by 0.002 factors to 0.325 from the earlier yr (0.323), indicating deepening inequality. The earnings quintile ratio, which divides the highest 20% earnings by the underside 20% earnings, additionally elevated by 0.06 proportion factors to five.78 instances from the earlier yr (5.72 instances), displaying a widening wealth hole. The relative poverty fee additionally worsened by 0.4 proportion factors year-on-year to fifteen.3%. A Ministry of Economic system and Finance official defined, “Distribution indicators considerably deteriorated because of the comparatively massive 4.4% enhance in earnings among the many high-income fifth quintile.”
Nevertheless, for these aged 66 and above within the retirement age group, distribution indicators improved, with the relative poverty fee bettering from 39.8% to 37.7% due to elevated public switch earnings.
Voices complaining about debt reimbursement burdens persevered on account of deteriorating financial sentiment. Amongst households with monetary debt, 64.3% responded that principal and curiosity reimbursement was burdensome. 3.8% of households additionally responded that family debt reimbursement could be unimaginable, elevating considerations about marginal households.
Based mostly on the survey outcomes, the federal government plans to reply with insurance policies for a virtuous cycle of progress and distribution. A ministry official acknowledged, “We are going to do our utmost to develop progress potential by way of AI (synthetic intelligence) transformation and 30 main initiatives for a super-innovative economic system,” and “On the identical time, we are going to put together and announce particular coverage duties corresponding to strengthening social security nets for susceptible teams together with low-income earners and increasing personalized job help.”
