Public Debt
According to the Ministry of Strategy & Finance, the government debt of Korea is estimated to reach 645.2 trillion won (US$545.5 billion) next year, and it is predicted that 373.1 trillion won (US$315.4 billion) of it should be covered by taxpayers, while the latter amount for this year is 333 trillion won (US$282 billion).
The ministry explained that this amount is forecast to increase to 410 trillion won (US$346 billion) in 2017, 442 trillion won (US$374 billion) in 2018, and 469 trillion won (US$396 billion) in 2019.
The ratio of the portion covered by taxes to total government debt is going up, too. Specifically, it amounted to 53.7 percent last year, and is expected to reach 55.9 percent at the end of this year. The estimates for next year and 2017 are 57.8 percent and 59.2 percent, respectively.
In the meantime, Korea’s government debt-to-GDP ratio is likely to exceed 40 percent in 2016 for the first time ever. With concerns mounting over its national fiscal health, the Ministry of Strategy & Finance recently remarked in its National Debt Management Plan report for 2015 to 2019 that the national debt needs to be controlled in view of the long-term fiscal risk factors including low fertility, costs associated with inter-Korean unification, aging of the population, and the size of public enterprise debts.