Cho Dong-chul, the president of Korea Development Institute (KDI), publicly issued a stark warning on government debt, going so far as to state, “The country will collapse.” In particular, he cautioned that South Korea’s national debt-to-gross domestic product (GDP) ratio could skyrocket to over 250
The government has announced its intention to reduce the ratio of household debt to gross domestic product (GDP) to below 100 percent by the year 2027.On Jan. 4, the government released the “2024 Economic Policy Direction,” outlining its strategy for managing household debt.According to the Bank for
Household and corporate debt as a percentage of the gross domestic product (GDP) has decreased for the first time in five years and nine months, signaling a trend of adjustment for the surging debt due to the COVID-19 pandemic.According to preliminary third-quarter cash flow data released by the Ban
Last year, the debt of the central and local governments, non-profit public institutions, and non-financial public enterprises in the public sector reached nearly 1,600 trillion won (US$1.24 trillion), marking a historic high. The debt of non-financial public enterprises such as Korea Electric Power
In the ratio of corporate debt to South Korea’s gross domestic product (GDP), it has been revealed that the country has moved from the fourth to the third position globally in just three months.According to the world debt report released by the Institute of International Finance (IFF) on Nov. 16, co
As of the end of last year, South Korea’s household debt-to-GDP ratio reached 108.1 percent, making it the second-largest country in the world in terms of household debt relative to national economic size. It was ranked fourth globally in 2021, but it has climbed two more steps in just one year.Acco
Last year, South Korea’s private debt growth rate relative to its gross domestic product (GDP) was reported to be the highest in the world. While households and businesses are reducing their debt in most countries in the aftermath of COVID-19, South Korea is drawing attention for moving in the oppos
On Sept. 4, international credit rating agency Fitch evaluated the South Korean government’s budget proposal for 2024 and the medium-term fiscal management plan as a “relatively robust fiscal policy.” It stated that it “may have a slightly (negative) impact on economic growth but will help strengthe
The author is an analyst for NH Investment & Securities. He can be reached at bk@nhqv.com -- Ed.In terms of policy effects, the US appears to be winning this new phase of the Cold War. Although Korea has chosen to support the US, it is still impacted by developments in both the US and China due to i
The International Monetary Fund (IMF) has warned of possible corporate debt distresses in Asian countries, singling out Korea as becoming one of the most vulnerable if high interest rates persist.In its report on corporate debt in Asia on May 29, the IMF aggregated by country the percentage of total
In the first quarter, the size of South Korea's household debt surpassed the Gross Domestic Product (GDP). Among the 34 major countries, South Korea was the only one unable to repay all household debt with its annual national income. It was also the sole country among the major economies globall
The IMF said in its report that South Korea’s national debt-to-GDP ratio exceeded the average of those of 10 advanced non-key currency countries for the first time in history.According to the IMF, the ratio of South Korea was 54.3 percent last year, when the average was 52 percent. According to the
The Ministry of Economy and Finance announced on Dec. 15 that South Korea’s public-sector debt increased from 1,280 trillion won to an all-time high of 1,427.3 trillion won in 2021.The amount, which is the sum of central government, local government, and public enterprise debts, was slightly over 1,
The author is an analyst of NH Investment & Securities. He can be reached at sw.kang@nhqv.com. -- Ed. Starting in October, US and non-US monetary policies began to diverge. Although it is premature to discuss a US hawkish peak out, the main hurdle has passed from a global perspective. Considering Au
South Korean enterprises’ debts are increasing rapidly with their corporate bond market shrinking fast. Their repayment capabilities are deteriorating amid high interest rates, inflation and economic slowdown. The number of companies with an interest coverage ratio of less than 1 is likely to increa
The International Monetary Fund (IMF) recently announced that South Korea’s government debt-to-GDP ratio would reach 54.1 percent at the end of this year.At the end of 2017, the ratio was 40.1 percent. In the same five-year period, the ratio of 35 advanced economies is estimated to rise from 71.6 pe
The possibility of South Korea’s credit crisis is rising, with interest rates going up and its economy slowing down. Its default risk indicators are surging, along with both household and corporate debts and interest burdens. Bloomberg recently reported that the Japanese and Chinese currencies are d
The author is an analyst of KB Securities. He can be reached at jk.lim@kbfg.com. -- Ed. Near-term concerns easing, but fundamental issues remainKTB yields should retreat for a while on hopes for a U.S. Fed pivot amid slowing economic indicators and the U.K.’s efforts to stabilize its financial marke
The South Korean government announced on July 7 that it would keep its fiscal deficit below 3 percent of South Korea’s GDP by budgetary austerity such as unprecedented government spending restructuring and government employee count and wage control.“The fiscal deficit-to-GDP ratio at the end of this
The South Korean government is planning to release a fiscal sustainability improvement plan this week. This is because South Korea’s national debt increased by more than 400 trillion won to over 1,000 trillion won for the past five years and its national debt-to-GDP ratio is currently at the highest