More Korean households are taking additional loans from financial firms to secure cash to buy basic necessities or pay back maturing debt.

Despite measures by financial authorities, it has not been easy to break out of the vicious circle in which debt is yielding more debt among a large proportion of households.

The gravity of the situation lies in that snowballing consumer debt is a key factor hampering the nation’s growth potential. Its significance is evident when the growth of the nation’s gross domestic product and collective household debt is compared.

While GDP inched up less than 3 percent on-year during the first half the year, the nation’s household debt surged more than 10 percent to reach an all-time high of 1.25 quadrillion won ($1.12 trillion) as of June 2016. Korea’s household debt is fast approaching its annual GDP, which amounted to $1.32 trillion in 2015.

The continuously spiraling debt in the private sector is weakening citizens’ purchasing power. This is blocking a speedy rebound in private consumption, which is a core part of GDP.

The trend continued last month, according to the Bank of Korea. Outstanding loans held by the first-tier banking sector came to 682.37 trillion won in August, up 8.71 trillion won from the previous month.

The situation is critical when it is compared with figures for past months -- the outstanding loans of 6.53 trillion won in June, 6.67 trillion won in May and 5.22 trillion won in April.

There is urgent necessity to look into the risks of bank mortgages, which were found to have initiated the surge. Out of the 8.71 trillion won that made up August’s growth, the mortgage segment took up 6.18 trillion won.

The government has fanned this unfavorable situation in a desperate bid to boost the real estate sector since early 2015. Despite warnings from economists in the private sector, policymakers have played a key part in raising apartment prices across major cities amid snowballing mortgage balance.

It is time to be alert to a possible hard landing of household debt. If the property bubble bursts, its impact on the economy and society would be far larger than the 2003 credit card fiasco.

The monthly growth in debt, which was announced Thursday, is a letdown to the government since the Finance Ministry announced a series of policies last month aimed at reigning it in. It said last month that it will tighten requirements for group loans for property redevelopments and asked the state-run Korea Land & Housing Corp. to reduce the supply of apartment units on the market.

Without full-fledged efforts for a soft landing, Korea may face an era of mid- and long-term depression in the wake of the weaker capacity of ordinary citizens to spend.