South Korea’s total debt in the private and public sectors neared the 3,000 trillion won ($2.75 trillion) mark in the second quarter of this year, spawning concerns that high indebtedness will undercut economic growth, data showed Sunday.

Combined debt held by the government, companies and households amounted to 296,2 trillion won as of end-June, accounting for 233.8 percent of the nominal gross domestic product, according to data.

The ratio of such debt to the GDP stood at 231.1 percent as of the end of last year, it showed. The ratio has been largely on a growing trend following the 2008 global financial crisis as the government expanded fiscal spending to spur growth and low borrowing costs prompted more households to rely on bank lending.

Korea’s household debt has been cited as the main bugbear for policymakers because households’ high indebtedness is feared to curb domestic demand and thus crimp economic growth.

The ratio of household’s debt against the GDP stood at 88.5 percent as of the end of June, down from 89.2 percent at the end of last year. The rate still hovered above a dangerous level of 85 percent, experts say.

Unlike the eurozone, which is mired in a debt crisis, South Korea maintained relatively strong fiscal health, which helped the country secure credit rating upgrades by three global credit appraisers.

However, analysts are sounding alarms over the government’s growing debt, saying the stimulus measures and a set of welfare pledges by politicians may hurt its fiscal soundness.

The ratio of state debts against the GDP reached 37.2 percent as of the end of the second quarter, up from 35.1 percent tallied at the end of 2011, data showed.

South Korea has delayed its timing of a fiscal surplus goal by one year to 2014. The government said in September it aims to post a fiscal surplus equivalent of 0.1 percent of GDP in 2014 following a deficit equal to 0.3 percent of GDP next year. (Yonhap News)