Korean households are exposed to the highest credit risk since 2003, when the nation’s economy was pummeled by massive credit card defaults. This conclusion is drawn by the Bank of Korea, which has recently conducted a survey of lending managers at 16 banks.

The central bank says the index of the household credit risk stands at 38 for the current quarter, the highest since the index soared to 44 in the third quarter of 2003, the year when the government-run Korea Asset Management Corp. was bailing out moribund credit card companies by assuming billions of dollars in their delinquent accounts.

The quarterly index, which hovered from 3 to 9 last year, is on a sharp rise ― from 9 in the first quarter to the current level of 38. It is higher than when the nation was going through the Great Recession ― 25 in the final quarter of 2008.

The central bank says the steep increase reflects a deepening concern about the debt repayment capacity of households, multiple borrowers in particular, which is worsening as the value of homes offered as security is falling. The household debt, which stood at 922 trillion won in the second quarter of this year, with 43 percent of the amount secured by homes, is regarded as a ticking time bomb.

According to one survey, countries such as the United States, Ireland and Spain were drawn into financial crisis when the ratio of national disposable income to household debt surpassed 100 percent. If this finding is applicable to Korea, the nation could face a similar crisis in two years. The ratio, which was at 84.7 percent at the end of last year, is projected to surpass the 100 percent mark in 2014 if it fails to pull itself out of the slump and generate a high rate of growth again.

As such, growth should take center stage in the debate on economic policy among presidential candidates. They cannot afford to ignore the risk posed by the snowballing household debt. They will have to come to terms with reality.

Simply put, when a new president is elected, the first order of business for him or her will be to draw up an economic plan geared for growth. The new president will also have to ponder how to prop up the property market while keeping the government from assuming household debt obligations.