South Korea's eager consumers are keeping their country's economy afloat with a huge increasing in debt-fuelled spending, the latest figures show.

Rock-bottom interest rates are fuelling the spree. which saw total household debt rise 8% between March and June.

The increase takes the total to 397.5 trillion won ($328bn; �208bn), 34% up on the previous year.

The gain is triggering concern among economists and policy makers, who fear that the massive upsurge in mortgage spending and credit card balances will also mean more bad debts for Korea's hard-pressed banks.

Following the financial crisis of 1997-8, corporate lending tailed off in Korea, to be replaced by loans targeted at individuals and families.

Delinquency rates at 16 banks which offer credit cards rose to 9.4% in June from 7.4% six months earlier. At 10 card-only companies, the rate in June was 7.9%, up from 5.8% in December.

And the boom is also affecting the housing market, with speculative buying of property in Seoul on the back of an official base rate of just 4.25%, unmoved since May.

Afloat

The gains reinforce the impression that - as in many other countries - the consumer is the only thing holding the economy together through the global downturn.

Admittedly, Korea's export performance is much better than that of some European countries, offering another prop to performance.

But growth is on the slide, falling to 1.4% between March and June from 1.9% in the previous quarter.

And there remains the risk of further weakness in its main export market, the US.