The Fastest Pace in OECD
The IMF said in its recent report that South Korea’s national debt-to-GDP ratio is likely to reach 51.3 percent at the end of this year and 66.7 percent at the end of 2026 and the rate of increase, 15.4 percentage points, is the highest among those of 35 countries classified as advanced economies.
According to the IMF, the 35 countries’ average national debt-to-GDP ratio is predicted to fall from 121.6 percent to 118.6 percent in that period as most of them are reducing their budget expenditures while recovering from COVID-19. “The G7 states’ average ratio is also expected to improve from 139 percent to 135.8 percent,” it said, adding, “On the other hand, South Korea’s ratio, which exceeded 50 percent this year, is estimated to exceed 60 percent in just three years and reach 66.7 percent in 2026 while the rates of increase of the Czech Republic, Belgium and Singapore stand at 8.7 percentage points, 6.3 percentage points and 6 percentage points, respectively.”
In the meantime, the OECD recently pointed out that South Korea’s potential GDP growth rate for 2030 to 2060 would be 0.8 percent a year if the current situation continued without any policy response. “South Korea’s potential GDP growth rate was 3.8 percent a year in 2000 to 2007 and 2.8 percent in 2007 to 2020 and is estimated at 1.9 percent in 2020 to 2030 and 0.8 percent in 2030 to 2060,” it explained, adding, “For reference, the OECD average for 2020 to 2030 is 1.3 percent and for 2030 to 2060 is 1.1 percent and South Korea and Canada are likely to be at the bottom in the OECD in 2030 to 2060.”
According to the OECD, the G20 states’ average for 2030 to 2060 is estimated at 1 percent and the United States’ and Japan’s figures for the same period are estimated at 1 percent and 1.1 percent, respectively.