Government to Pursue KRW 2 Trillion 'Net Bond Repayment' This Month... National Debt Ratio from 48.2% to 47.2%

Proceeding in 'Emergency Buyback' Format
National Debt-to-GDP Ratio at 47.2%, Down 1.0%P

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The government has decided to purchase a total of 2 trillion won worth of government bonds over two days, on the 25th and 31st of this month. As a result, the national debt ratio relative to the gross domestic product (GDP) at the end of this year will decrease by 1.0 percentage point, from 48.2% to 47.2%.

The Ministry of Economy and Finance announced on the 20th that it will proceed with the repayment of 2 trillion won in government bonds, which was reflected in the second supplementary budget (supplementary budget) formulation.

This is the largest scale of government bond repayment promoted through supplementary budgets so far. The Ministry of Economy and Finance purchased 1.3 trillion won and 700 billion won worth of government bonds during the supplementary budget formulations in 2016 and 2017, respectively.

This government bond net repayment will be conducted in the form of an "emergency buyback," announced shortly before the bidding time, considering market conditions.

With the early repayment of 2 trillion won in government bonds, the forecast for the real growth rate is revised upward from 3.2% to 4.2%. The national debt ratio relative to GDP will also decrease by 1.0 percentage point, from 48.2% to 47.2%.

Meanwhile, the Ministry of Economy and Finance stated, "By purchasing items with relatively low liquidity, it is expected to contribute to stabilizing market sentiment in the government bond market to some extent."

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