A 63% Surge since 2017
The Korea Economic Research Institute announced on April 26 that South Korea’s national debt (D1) has increased 62.9 percent from 660 trillion won to 1,075 trillion won since 2017. “The average annual increase in 2012 to 2023 is estimated at 3.2 percent, which is 1.8 times the OECD average, and the increase since 2017 is no less than 28.1 percentage points higher than the increase in 2013 to 2017,” it said.
D1 is divided into central and local government debts. D2, general government debts, is the sum of D1 and those of nonprofit public institutions. D3, public sector liabilities, is the sum of D2 and those of non-financial public enterprises.
“According to the OECD, South Korea’s D2-to-GDP ratio will increase from 45.4 percent to 52.6 percent from 2020 to 2023 whereas the ratio will decrease in 18 OECD member states,” the institute explained, continuing, “The ratio is estimated to increase in 15 member states, in which South Korea is the eighth in terms of the rate of increase behind Australia, the Czech Republic, Estonia, Finland, Iceland, Latvia and New Zealand.”
In the meantime, according to a recent IMF report, South Korea’s D2-to-GDP ratio is estimated to increase from 47.9 percent to 66.7 percent from 2020 to 2026 and the rate of increase is likely to be the highest in the 35 most advanced economies.
“The national debt is predicted to increase in 12 countries and the debt ratio is forecast to increase by more than 10 percentage points only in South Korea, the Czech Republic, Malta and New Zealand,” the IMF said, adding, “The national debt is expected to decrease in the other 23 countries and the average D2-to-GDP ratio of the 35 is estimated to decrease from 122.7 percent to 118.6 percent from 2020 to 2026.”