It has been found in the Strategy and Finance Ministry’s budget plan for next year that the Ministry has earmarked 8.9993 trillion won (US$8.2055 billion) as the interest to be paid on the Public Capital Management Fund deposit.
The amount is equivalent to 4 percent of Korea’s total national tax income for 2015. The interest cost was just 3.0641 trillion won (US$2.7930 billion) six years ago, when Korea turned to red-ink financing. This means that the monetary authorities are increasingly resorting to emergency funds to deal with the current economic recession, lack of tax revenue, and excessive welfare pledges repeatedly made in elections.
The Public Capital Management Fund deposit is defined as the public funds borrowed by the authorities for financing purposes. The money amounted to 24.5 trillion won (US$22.3 billion) last year alone, and the total balance is 172 trillion won (US$157 billion) now. The balance has increased along with the interest, compromising the national fiscal health to a significant extent.