South Korea's corporate loans rise sharply amidst the pandemic

Loans soared 14.9% from January-May compared to a year earlier.

South Korea’s corporate loans have risen sharply on the back of the coronavirus pandemic, leading to a surge in the country’s money supply, reports Yonhap News Agency, based on data from the central bank.

As of end-May, South Korea’s M2 money supply came at a record $2.56t (KRY3,065.8t), up 10.6% from the same period a year early, according to the Bank of Korea (BOK).

This is the largest amount ever in the history of the country, whilst the on-year growth rate also represents a record high.

Outstanding corporate loans increased by $146.7b (KRY177.3t) over the same period and accounted for 60.6% of the M2 gain of $245.34b (KRY292.6t).

Meanwhile, household loans contributed 20% to the increase of the total money supply.

As of end-May, outstanding corporate loans soared 14.9% from a year earlier, far outpacing the 4.9% hike in household loans.

M2 is a measure of the money supply that counts cash, demand deposits and other near money that is easily convertible to cash.