Is Korea Following Japan’s Declining Path?

A Korean newspaper reports on Monday that Korea’s real debt to GDP ratio is over 130%.

As we know, Japan’s debt to GDP ratio is about 200%.

Japan has been experiencing the outcomes of real estate and stock market bubble hangover.

Japan has been propping up the banks. And yet, zombification of its banks is still ongoing.

Although they have undergone lost decades after the Plaza Accord and the bubble burst, they have been able to muddle through due to global boom and prosperity. That doesn’t seem to be the case going forward.

Are we seeing this repeat pattern?

Both Japan and Korea accomplished the rapid growth over a relatively short time. In the wake of the rapid growth, the economic inflation follows and could lead to the economic decline.

Perhaps one of the hardest questions Korea has to ask is: are we saddling our future generation with tough living conditions?