Restraining Debt Ratio
Assistant Deputy Minister of Strategy & Finance Jo Kyu-hong said on November 30 that South Korea’s national debt-to-GDP ratio as of the end of this year is estimated at 39% or less and the ratio is unlikely to exceed 40% next year.
“In view of the possibility of an interest rate hike, the amount of the government bonds scheduled to be issued in December this year will be reduced by 2.1 trillion won (US$1.9 billion) compared to the previous plan to 4.8 trillion won (US$4.3 billion),” he mentioned at a meeting held that day, adding, “This year’s total government bond issuance is estimated to be reduced by 8.9 trillion won (US$8.0 billion) to 101.2 trillion won (US$91.0 billion).” At present, deficit-financing bonds are estimated at 34 trillion won (US$30 billion), down 8.4 trillion won (US$7.5 billion), and the annual budget surplus is estimated at 2.5 trillion won (US$2.2 billion) or so.
He went on to say that the budget plan for next year needs to be passed before December 3 for the government’s fiscal policy to be executed without a hitch. With regard to the expansion of performance-based salary in public agencies, he remarked that 90 out of the 120 agencies that adopted it have completed the formulation of assessment systems and 29 of the rest will do so within this year.
“Public agencies’ functions are to be adjusted in the fields of government-led financing, medical and healthcare and industrial promotion next year,” he said, adding, “During the course, the government is going to focus on the reduction of non-core business while cutting down on works conducted by multiple organizations or in the private and public sectors alike.”