SEOUL: Korea’s national debt rose by 53.5 trillion won ($46.7 billion) in 2015 from a year earlier as the government managed an expansionary fiscal policy to pump-prime the sluggish economy, the finance ministry said Tuesday.
The national debt that covers the central government’s general and special accounts and funds reached 556.5 trillion won last year, up from 503 trillion won a year earlier, according to the 2015 settlement of accounts endorsed by the Cabinet.
The Ministry of Strategy and Finance said the 53.5 trillion won increase included 46.8 trillion won worth of state debt raised by Treasury bonds. The size of the debt is equal to 35.7 percent of the nation’s gross domestic product last year, up from 33.9 percent tallied in 2014.
However, it decreased 4.7 trillion won from an earlier forecast of 561.2 trillion won. Adding regional government debts, the nation’s general government debt soared to 590.5 trillion won last year, accounting for 37.9 percent of the GDP, the ministry added.
“National debt increased at a slower-than-expected pace. It’s an improvement. But we don’t think it’s a complete turnaround, as the debt-GDP ratio is still rising,” said Cho Yong-man, head of the fiscal management bureau at the finance ministry. “The national debt will continue to increase in 2016 as the size of the country’s economy grows every year. But we expect its pace to slow down slightly.”
The Korean government set an extra budget of 11 trillion won last year to prop up the faltering economy, which grew at a three-year low of 2.6 percent due to faltering exports and waning domestic demand. Asia’s fourth-largest economy saw its exports post negative growth in all 12 months of last year, with an 8 percent decline for the whole of 2015.
Meanwhile, the finance ministry said the government posted a budget surplus in fiscal year 2015 for the first time in four years as its tax revenue edged up due to increased real estate transactions. The gross revenue that the government brought in last year came to 328.1 trillion won, as its tax revenue edged up due to increased real estate transactions, while its expenditures totaled 319.4 trillion won. As a result, its surplus reached 8.7 trillion won last year, a turnaround from a deficit for three consecutive years from 2012.
