Financial Crisis 'Warning' → Debt Ratio Reduced to 16.6%... Incheon City Secures Fiscal Soundness
[Asia Economy Reporter Park Hyesook] The debt ratio of Incheon City, which had been facing severe financial difficulties, has significantly decreased.
According to the city on the 19th, the general and special account revenues for the 2019 fiscal year totaled 12.0493 trillion KRW, expenditures were 10.4059 trillion KRW, and the net global surplus was recorded at 892.9 billion KRW.
The debt stood at 1.9704 trillion KRW, with a debt ratio against the budget of 16.64%. This is a 3.3 percentage point decrease from the previous year's 19.94%.
In particular, excluding Build-Transfer-Lease (BTL) project operators, the debt decreased significantly by 247.1 billion KRW compared to the previous year, earning the city the Minister of the Interior and Safety Award and an incentive of 100 million KRW.
Incheon City's debt ratio has been on a downward trend annually: 37.5% in 2014, 33.4% in 2015, 30.4% in 2016, 21.9% in 2017, 19.9% in 2018, and 16.6% in 2019.
Assets under financial accounting increased by 7.5084 trillion KRW from the previous year to 57.8816 trillion KRW.
Liabilities, including proceeds from the sale of the Songdo-dong A10 site and Seonhak Stadium excluded site (advance payments), rose by 62.9 billion KRW from 2.8793 trillion KRW at the end of the previous year to 2.9422 trillion KRW. However, the debt-to-asset ratio decreased by 0.64 percentage points from 5.72% last year to 5.08%.
Incheon City suffered severe financial difficulties due to simultaneously undertaking large-scale projects such as hosting the 2014 Incheon Asian Games, constructing Incheon Subway Line 2, and developing the Free Economic Zone, causing the debt ratio to soar to 39.9% in March 2015.
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Although it was designated as a 'caution' financial crisis organization in August 2015, after implementing a three-year financial soundness plan, it was removed from the financial crisis caution grade in February 2018.
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