Concerns Over National Debt Ratio Reaching 45% This Year... Attention on the Scale of the 3rd Supplementary Budget

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] There is a forecast that this year’s national debt could reach 45% of the Gross Domestic Product (GDP). This is due to increased government spending to prepare for the novel coronavirus disease (COVID-19) crisis. It is expected to arrive three years earlier than predicted in the government’s 2019?2023 National Fiscal Management Plan.

According to the Ministry of Economy and Finance on the 10th, reflecting the first and second supplementary budgets totaling 23.9 trillion won prepared this year, the national debt will increase by 1.38 trillion won from the original budget of 805.2 trillion won to 819 trillion won.

The national debt-to-GDP ratio rose from 39.8% in the original budget to 41.2% after the first supplementary budget and 41.4% after the second supplementary budget. If the third supplementary budget reaches 30 trillion won, the national debt ratio will rise to 44.4%.

The third supplementary budget plan will include revenue adjustments (to cover expected tax shortfalls), special employment stabilization measures, reinforcement of a 135 trillion won financial and livelihood stabilization program, and funds for economic stimulus. Attention is focused on how much additional revenue adjustment and economic stimulus funds will be included.

The ruling party, government, and Blue House are expected to focus on discussing how to manage the pace of fiscal expenditure increases at the National Fiscal Strategy Meeting chaired by President Moon Jae-in in the last week of this month. The Ministry of Economy and Finance plans to submit the 2020?2024 National Fiscal Management Plan to the National Assembly in September.

Meanwhile, the national debt per capita has been revealed to be approaching 15 million won. According to the National Debt Clock by the National Assembly Budget Office on the 10th, as of 9:09 p.m. on the 9th, the national debt per capita (D1) was 14,836,349 won. At the same time, the total national debt was approximately 769.185 trillion won.

This content was produced with the assistance of AI translation services.