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Korean Gov’t Pays 80.2 Bil. Won in Interest in 2013 H1
Snowballing Gov’t Debts
Korean Gov’t Pays 80.2 Bil. Won in Interest in 2013 H1
  • By matthew
  • October 15, 2013, 06:25
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The National Assembly’s administration inspection started on October 14 and will inspect 628 public organizations for the next 20 days.
The National Assembly’s administration inspection started on October 14 and will inspect 628 public organizations for the next 20 days.

 

The Korean government paid around 80 billion won (US$74.7 million) during the first half of this year in interest on its short-term loans to make up for revenue shortfalls and secure money to cover operating expenses. 

According to data submitted to the ruling Saenuri Party’s Rep. Lee Hahn-koo on October 14 by the Finance and Strategy Ministry, the government’s total interest payment for its short-term loans stood at 80.2 billion won (US$75.1 million) during the first six months of this year. 

The loan amount was up from 13.1 trillion won (US$12.3 billion) a year earlier, recording the highest in the last five years.

The government paid 60.6 billion won (US$56.8 million) in interest for loans through the sale of Treasury bills and 19.6 billion won (US$18.4 million) in interest for loans from the Bank of Korea. 

The increase resulted in the government collecting about 10 trillion won (US$9.4 billion) less in taxes than the first half of last year. The revenue shortfalls have been posing a heavy burden on the government, which now pushes expansion of fiscal spending to boost economic growth.

Meanwhile, the top 30 state-run enterprises also paid 6.8 trillion won (US$6.3 billion) in interest last year. 

Data disclosed on the same day by Rep. Kim Kwan-young of the opposition Democratic Party shows that last year’s interest payments made by KEPCO amounted to 2.344 trillion won (US$2.195 billion) while its debt rose by 12.4 trillion won (US$11.6 billion) to 95.089 trillion (US$89.064 billion). The lawmaker calculated that the public power generation company paid as much as 6.4 billion won (US$6.0 million) a day in interest last year alone. 

The Korea Expressway Corporation incurred an additional debt of 757.2 billion won (US$708.7 million) last year, and paid 1.017 trillion won (US$952.6 million) in interest. Its outstanding debt is 25.348 trillion won (US$23.749 billion). KOGAS and Korea Land & Housing Corporation (LH) paid 2.3 billion won (US$2.2 million) and 1.9 billion won (US$1.8 million), respectively, in interest per day.

The state-run companies increased their debt without any hesitation, even while they paid billions won in interest the every day. The debt amount increase of LH was 7.551 trillion won (US$7.072 billion) last year, followed by the Korea Deposit Insurance Corp. (5.297 trillion won, US$4.963 billion), KOGAS (4.182 trillion won, US$3.918 billion), Korea Rail Network Authority (1.773 trillion won, US$1.661 billion), Korea Water Resources Corp. (1.197 trillion won, US$1.121 billion), and KORAIL (864.7 billion won, US$809.9 million).