Crisis Management for a Conflict with North Korea

Korea Herald | English | News | Sept. 13, 2024 | Financial System Problems

Finance Minister Choi Sang-mok announced plans to tighten control over rising household debt and address a payment crisis involving e-commerce platforms Tmon and WeMakePrice. As of August, outstanding household loans reached 1,130 trillion won ($840 billion), with a significant increase of 9.3 trillion won in just one month, the highest rise since July 2021. Mortgage loans were the primary driver behind this growth. While household debt continues to escalate, the South Korean economy has remained stable with easing inflation, as the consumer price index increased by only 2 percent year-on-year in August, meeting the central bank's target. The government is taking steps to stabilize food prices ahead of the Chuseok holiday and has committed to vitalizing investments to support economic recovery. A liquidity crisis involving Tmon and WeMakePrice, which owes 1.3 trillion won to vendors, is being addressed with ongoing debt restructuring and financial support to affected businesses. Proposed regulatory changes for the e-commerce sector aim to prevent future payment issues, including shorter settlement periods for large retailers.