This picture shows the facade of the Ministry of Finance and Economy headquarters at Government Complex Sejong in Sejong, Feb. 14, 2023. Newsis

The combined debt of the government and households in Korea has surpassed 3,000 trillion won ($2.26 trillion) for the first time, driven by lower tax revenue, increased bond issuance and aggressive borrowing from households for real estate investments, government data showed Sunday.

According to data from the finance ministry and the central bank, the country's combined national debt and household debt reached a record 3,042 trillion won as of the end of the second quarter. This amounts to approximately 127 percent of last year's nominal GDP of 2,401 trillion won.

The national debt increased by 30.4 trillion won from the previous quarter to 1,146 trillion won amid a combination of various factors, such as the sluggish economy and ongoing tax revenue shortfalls.

Household debt surged to a record high of 1,896 trillion won, primarily due to the recent recovery in housing transactions, which has driven up related loans.

National debt primarily consists of government bonds, loans and financial obligations, with government bonds making up the majority. Household debt encompasses loans from banks and insurance companies.

The combined debt of the government and households increased by 44 trillion won in the second quarter from the previous quarter, compared with a 20 trillion-won rise in the first quarter.

It marked the largest quarterly increase since the third quarter of 2021, when the COVID-19 pandemic was at its peak.

"The rising trend of national and household debt could further constrain the recovery of domestic demand in the future," said Kim Kwang-suk, head of the economic research department at the Institute for Korean Economy & Industry. (Yonhap)