SEOUL, April 8 (Yonhap) — Excess funds held by South Korean households and nonprofit agencies more than doubled in 2020 from a year earlier due mainly to an extended slump in private consumption amid the COVID-19 pandemic, the central bank said Thursday.
Net financial funds — the value of financial assets minus financial liabilities — held by local households and nonprofit organizations serving households amounted to 192.1 trillion won (US$172 billion) last year, sharply up from 92.2 trillion won a year earlier, according to preliminary data by the Bank of Korea (BOK).
Excess funds refer to the volume of money that remains on the balance sheets of households after people manage available funds via deposits, stock investments and other means.
Their excess funds also grew last year on the back of increased liquidity meant to support the economy hit by the new coronavirus outbreak.
Local companies’ new borrowing expanded in 2020 from a year earlier as their sales declined and demand for operating funds rose amid the pandemic, the BOK said.
Net borrowing of non-financial enterprises came to 88.3 trillion won last year, compared with 61.1 trillion won a year earlier, according to the BOK.
The government sector was also a net borrower as it increased fiscal spending in response to the pandemic. Its net borrowing reached 27.1 trillion won last year, compared with net lending of 29.5 trillion won.