The Ministry of Economy and Finance announced on Dec. 26 that South Korea’s public debts increased from 1,044.6 trillion won to 1,078 trillion won in 2018. The amount of increase, which had been eight trillion won in 2017, jumped to 33.4 trillion won in 2018.
This has to do with the South Korean government’s nuclear phase-out policy that led to soaring debts in public energy enterprises. Specifically, the liabilities of Korea Electric Power Corp. and its six power generation subsidiaries increased 5.6 trillion won, led by new facility investments, and the liabilities of Korea Gas Corporation rose 2.3 trillion won. Those of non-financial public enterprises as a whole increased 9.1 trillion won to 387.6 trillion won.
In the meantime, the government debts increased 24.5 trillion won to 759.7 trillion won due to fiscal expansion. The government debt-to-GDP ratio and the public debt-to-GDP ratio remained at 40.1 percent and 56.9 percent, respectively.
“The liabilities increased by the same amount as the GDP,” the ministry explained, adding, “Government bonds for supplementary tax revenues increased by 19 trillion won and the national housing bonds increased by 3.8 trillion won based on more real estate transactions.” It also said that South Korea’s government debt ratio was fourth-lowest among those of 33 OECD member countries and South Korea’s public debt ratio was second-lowest among those of seven OECD member countries behind Mexico’s 47.1 percent.