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).