Forecast: Total Non-Performing Loans in South Korea

The total non-performing loans (NPLs) in South Korea show a consistent decline from 2013 through 2023, reducing from 0.57 units to 0.29 units in 2023. This trend persists in the projected data, with NPLs expected to drop further to 0.22 units by 2028. From 2022 to 2023, there was a notable year-on-year decrease of 6.45%, continuing the multi-year downward trend. The average annual decline over the past five years, as indicated by a CAGR of -4.78%, underscores the steady improvement in managing non-performing loans. The forecasted five-year growth rate of -21.73% suggests significant ongoing reductions through 2028.

Future trends to watch for:

- Increased stability and stringent risk management practices within the financial sector.

- Potential shifts in economic conditions impacting loan performance.

- Enhanced regulatory frameworks to mitigate NPL risks.

- Innovations in financial technologies aiding in the early detection and management of potential non-performing loans.

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