[News Focus] National debt increases by W100tr in just 9 months


A capture from the National Assembly’s Budget Office homepage indicates that Korea’s national debt is well over 900 trillion won on Thursday. (National Assembly Budget Office)

SEJONG – South Korea’s national debt is believed to have exceeded 900 trillion won ($ 770 billion) this year for the first time, although the government has yet to release the updated official figure.

According to calculations by the National Assembly’s Budget Office, the national debt – debt directly held by central and local governments – was estimated at 938.9 trillion won on Thursday. The latest official figure, released by the government, was 898.1 trillion won in June.

This means that total debt has grown by more than 100,000 billion won in nine months, after first hitting the 800 trillion won mark in November 2020.

And from 660.7 trillion won at the end of 2017, it was up 42.1 percent. The Moon Jae-in administration took office in May 2017.

(Graphic by Kim Sun-young / The Korea Herald)

(Graphic by Kim Sun-young / The Korea Herald)

Last year, Korea’s nominal gross domestic product recorded 1,933.1 trillion won, indicating that the national debt-to-GDP ratio is estimated to have approached 50% for the first time to reach a record level of 48.5%.

The estimated figure for August 2021 could mean an increase of around 6 percentage points from the end of 2020, when the ratio was 41.6%, but this estimate depends on factors such as GDP for GDP in 2021 and whether the purchase by the Ministry of Finance of Treasury bonds to repay part of the debt.

Recent debt-to-GDP ratios were 36% in 2017, 32.6% in 2013, 29.8% in 2009, 25.9% in 2005 and 17.2% in 2001, according to data from the Ministry of the Economy and Finance.

Despite concerns over the alarming fiscal health, ruling party lawmakers and government officials continued to downplay the importance, saying the level of debt-to-GDP was still “way behind schedule. OECD average “.

In the aftermath of the pandemic since early 2020, government spending – including payments for hard-hit households and industries – has become more vigorous, in addition to full-fledged stimulus packages, such as active issuance. treasury bills, since before the pandemic.

Opponents continued to question the effectiveness of fiscal expansion via increased debt under administration. They pointed to a sharp increase in only non-regular jobs and disappointing GDP growth – below 3% in 2018 and 2019, and minus 0.9% in 2020.

The government refutes the critics, saying the policies have benefited the overall economy.

According to the National Assembly Budget Office, the desirable national debt per capita is 18.17 million won for a population of 51.6 million.

The figure jumped to around 2.7 million won in less than a year, from 15.42 million won in September 2020, after crossing the 13 million won mark for the first time in February 2018.

Sovereign debt per capita was 11.59 million at the end of 2015. This means that the national debt burden of an ordinary citizen has increased by 56%, on an arithmetic basis, in about six years.

By Kim Yon-se ([email protected])

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