The Bank of Korea(BOK) said it is hard to predict if the recent slowdown in household debt will last through next year and the months after.

The central bank expressed concerns of a possible rise in market volatility as major economies' fiscal policies quickly shift to normalization from austerity measures over inflation fears.

In a report released on Thursday, the BOK said the government's tightened policy on household loans will suppress borrowing sentiment, but projected that mortgages and other loans less affected by restrictions will continue to rise, adding to risks of financial imbalance.

Meanwhile, the central bank predicted Korea's private consumption to show strong recovery until the first half of next year, driven by the living with COVID-19 scheme and increased purchasing power.