Last Year Public Sector Debt 1,280 Trillion Won... 66.2% of GDP

Increased by 147 trillion over the year
General government debt rose by 134 trillion to 945 trillion... 48.9% of GDP

[Sejong=Asia Economy Reporter Kim Hyunjung] Last year, public sector debt (D3), including government and non-financial public enterprises, increased by nearly 150 trillion won, surpassing 1,200 trillion won for the first time. The ratio of public sector debt to Gross Domestic Product (GDP) soared to 66.2%.

On the 16th, the Ministry of Economy and Finance held the Fiscal Management Strategy Committee chaired by Second Vice Minister Ando Geol and announced the results of the '2020 General Government Debt (D2) and Public Sector Debt (D3) Calculation.' Last year, public sector debt reached 1,280 trillion won, a 13.0% (147.4 trillion won) increase from 1,132.6 trillion won in 2019. Public sector debt is the sum of general government debt and the debt of non-financial public enterprises such as Korea Electric Power Corporation, Korea Land and Housing Corporation (LH), and Seoul Housing Corporation (SH), excluding internal transactions such as loans from funds to public enterprises.

The ratio of public sector debt to GDP was 66.2%, up 7.3 percentage points (p) from the previous year, marking an all-time high. The increase was also the largest since 2013 (2.9%p).

However, the Ministry of Economy and Finance explained that the increase in public enterprise debt included in public sector debt was relatively low at 12.3 trillion won. Among the eight OECD countries that calculate public sector debt, Korea's debt ratio is the second lowest after Mexico (54.6%).

General government debt (D2), which adds non-profit public institution debt to central and local government national debt (D1), was 945.1 trillion won last year, up 16.6% (134.4 trillion won) from 810.7 trillion won the previous year. The ratio of general government debt to GDP was 48.9% last year, up 6.8 percentage points from 42.1% the previous year, marking the highest level since statistics began in 2011.

The Ministry of Economy and Finance emphasized that the increase in the general government debt ratio of advanced countries was 18.9 percentage points from 2019 to 2020, and that Korea's general government debt ratio is low compared to the United States (133.9%), Japan (254.1%), and Germany (69.1%), stating, "Our country's debt ratio is favorable in terms of both scale and quality compared to major countries."

Among the increase in general government debt, the increase in central government debt accounted for most at 127.2 trillion won. Of this, government bond issuance was 116.9 trillion won. The increase in local government debt was 9.1 trillion won, while education autonomous body debt decreased by 700 billion won due to favorable education finance grants.

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