'National Debt' Government Bonds and Special Bonds Surpass 1300 Trillion Won... 40% Increase Since Moon Administration

Kim Boo-kyum Suggests Possibility of Supplementary Budget Increase

[Asia Economy Sejong=Reporter Kwon Haeyoung] Due to the fiscal expansion triggered by COVID-19, the outstanding issuance balance of government bonds and special bonds, which the government guarantees directly or indirectly, has surpassed 1,300 trillion won. It has increased by nearly 40% since the Moon Jae-in administration. Amid the rapid increase in national debt, the government, which began reviewing an additional supplementary budget (supplementary budget) of 14 trillion won from this week, has stepped back from its previous tough stance by leaving open the possibility of an increase based on bipartisan agreement.

According to the Korea Financial Investment Association on the 7th, the outstanding issuance balance of government bonds (940.9824 trillion won) and special bonds (379.5265 trillion won) totaled 1,320.5089 trillion won. ▶Related article page 4

The outstanding issuance balance of these two bonds increased by 37.6% in just five years from 959.1315 trillion won at the end of May 2017, when the Moon administration took office. Government bonds, such as treasury bonds and fiscal securities guaranteed by the government, belong to national debt along with foreign currency foreign exchange stabilization fund bonds and borrowings. Special bonds issued by public institutions are also hidden national debt in that the government guarantees the principal and interest payments.

The snowballing national debt is attributed to the Moon administration’s issuance of deficit bonds significantly increasing through ten rounds of supplementary budgets totaling 150 trillion won. Public enterprises such as the Korea Housing Finance Corporation and Korea Electric Power Corporation also increased bond issuance while supporting government policies such as the low-income safety conversion loan and expansion of renewable energy investment, which is believed to have increased the outstanding balance.

After the presidential election next month and the inauguration of the new government, regardless of who it is, the possibility of a second and third supplementary budget is high, and the national debt is expected to increase further. Based on this year’s main budget, the national debt is 1,075.7 trillion won, equivalent to 50.1% of the gross domestic product (GDP). This figure reflects only the first supplementary budget of 14 trillion won.

Meanwhile, as the Democratic Party of Korea pressured an increase in the supplementary budget even mentioning the impeachment of Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, Prime Minister Kim Boo-kyum drew attention by suggesting the possibility of an increase based on bipartisan agreement. Prime Minister Kim appeared before the National Assembly’s Budget and Accounts Special Committee on the day and said, “Excessive issuance of government bonds affects not only the increase in national debt but also interest rates, prices, and the government bond market. The fiscal authorities have also comprehensively considered and prepared the supplementary budget.” He added, “Nevertheless, if the National Assembly, representing the people, reaches a consensus, the government will do its best to derive a reasonable plan.”

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