National Debt at 927 Trillion KRW at the End of August... 13 Trillion KRW Increase from Previous Month

Monthly Financial Trends and Issues October Edition

[Sejong=Asia Economy Reporter Kim Hyunjung] As the government continues expansionary fiscal policies to respond to COVID-19, the national debt (central government) reached 927 trillion won last month. Although the increase in tax revenue has slowed, the scale of expenditures remains high, making it difficult for the debt to decrease.

According to the October issue of the "Monthly Fiscal Trends and Issues" published by the Ministry of Economy and Finance on the 12th, as of August this year, the national debt stood at 927 trillion won, an increase of 13 trillion won compared to the previous month (914.2 trillion won). This was due to the issuance of new government bonds worth 17.5 trillion won in the same month and partial repayment of 4.5 trillion won.

From January to August, government bond issuance amounted to 140 trillion won, which is 75.1% of the annual issuance limit (186.3 trillion won), issued at an average procurement interest rate of 1.71%. Demand from foreigners, insurance companies, and pension funds continued, with foreign net investment in government bonds reaching 30 trillion won. The proportion of foreign holdings based on outstanding bonds is about 18.1%.

With increases in total revenue including national taxes and fund asset management income, the integrated fiscal balance deficit improved by 41.1 trillion won from 70.9 trillion won at the end of August last year to 29.8 trillion won. Excluding the social security fund balance (40.4 trillion won), the managed fiscal deficit at the end of August also improved by 25.8 trillion won compared to a year earlier, standing at 70.2 trillion won.

Meanwhile, according to the "2021-2025 National Fiscal Operation Plan" submitted by the Ministry of Economy and Finance to the National Assembly, next year's national debt is expected to surpass 1,000 trillion won for the first time, reaching 1,068.3 trillion won. The national debt to GDP ratio for next year is projected to be 50.2%.

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