text: Household borrowing grows at a slower pace
  Korean households have become less fiscally sound despite their debt growing at the slowest pace in over 15 years, a central bank report said Thursday.
  Outstanding household debt, including credit spending, came to 1,572.7 trillion won ($1.35 trillion) as of the end of September, up 3.9 percent from a year earlier, according to the report from the Bank of Korea.
  "While the households' debt payment burdens continue to remain high, the default rate of non-banking lenders has recently been on the rise," the bank said in its report on the country's financial stability submitted to parliament.
  As of end-September, the debt-to-disposable income ratio of people aged 60 years or older came to 212.6 percent, significantly higher than the average 164.4 percent and 189.8 percent for younger age groups, according to the central bank.
  "Despite the slowing growth in household debt, the debt-to-disposable income ratio of households rose 2.9 percentage points from the same period last year to 160.3 percent at end-September due to reduced income," the bank said.
  Overall borrowing by local households and companies came to 194.5 percent of the country's nominal GDP as of end-September, up 8.2 percentage points from a year earlier, according to the central bank.
  Asia's fourth-largest economy is estimated to expand 2 percent this year, which would mark the slowest since 2009, when it grew 0.7 percent on-year.
  Such an increase follows two policy rate cuts by the central bank, in July and October, that sent the base interest rate to the record low of 1.25 percent.
  Korea's exports have dropped for 12 consecutive months as of November, while December is widely expected to mark the 13th consecutive month of a drop with outbound shipments in the first 20 days of the month slipping 2 percent on-year.
  "The country needs to watch out for the possibility of corporate credit risks expanding in the future as the credit ratings of local companies are beginning to show signs of weakening, while their financial stability may be deteriorating," the bank said.
  "[Foreign] stock investment had generally been on the rise in the first half but has been decreasing since August due to the continued uncertainties stemming from the U.S.-China trade dispute and economic slumps in other major economies," it said.