Gwangju City Debt Surpasses 2 Trillion Won... Highest Among Metropolitan Cities

City Council's "2024 Revenue and Expenditure Settlement Report"
Local Bond Interest Alone Reaches 119.5 Billion Won Over Past 5 Years
"Need to Reprioritize Budget Priorities"
City: "Active Fiscal Management for Economic Revitalization"

A view of Gwangju City Council.

The debt of Gwangju City has surpassed 2 trillion won, making it the highest among all special and metropolitan cities in South Korea.

According to the "2024 Fiscal Year Gwangju City General and Special Account Revenue and Expenditure Settlement" review report released by the Gwangju City Council on June 9, the total amount of local bonds for Gwangju City, based on the main budget for this year, was tallied at 2.07 trillion won. Considering that Gwangju's population is less than 1.4 million, this means each citizen is shouldering approximately 1,477,000 won in debt.

Based on the 2024 settlement, Gwangju City's debt ratio stands at 23.1%. This is the highest among all special and metropolitan cities nationwide, compared to Seoul at 21.5%, Daegu at 19.0%, and Busan at 18.8%.

The Gwangju City Council, in particular, raised concerns about interest expenses in the report. The city spent as much as 119.5 billion won on interest payments from local bond issuance over the five years from 2020 to 2024.

This amount could be used to provide childbirth incentives of 10 million won per person to about 12,000 people, to introduce 480 low-floor buses costing 250 million won each, or to build four new municipal libraries.

This year, the city's fiscal independence ratio dropped to 39.8%, falling into the 30% range for the first time since 2001, when the city struggled during the IMF crisis. The fiscal autonomy ratio also fell to 58.3%, indicating a sharp decline in both financial independence and autonomy.

The scale of internal transactions, in which funds are borrowed from other accounts such as funds or special accounts, is also increasing rapidly. As of 2024, Gwangju City borrowed and used 47 billion won from funds and 156 billion won from special accounts, totaling 203 billion won. This is nearly double the amount at the start of the 8th popularly elected administration in 2022 (107 billion won).

Additionally, the increase in project costs for the Urban Railway Line 2 and the implementation of the Y Project, both major current issues, were identified as factors that could further increase Gwangju City's fiscal burden in the future.

A city council official stated, "Gwangju City's debt level is concerning," and emphasized, "It is necessary to reduce reckless local bond issuance and internal transactions, and to reprioritize the budget to focus on improving citizens' quality of life."

In response, Gwangju City issued a statement on the same day explaining, "The rise in the debt ratio is due to the construction of Urban Railway Line 2, social welfare contributions, the opening of the Sangmu-Cheomdan road, the construction of the Gwangju Representative Library, and the creation of long-unexecuted urban parks." The city added, "We aimed to revitalize the local economy through active and preemptive fiscal management."

The city further stated, "Going forward, we will continuously monitor the status of fiscal operations to achieve both efficiency and soundness in fiscal expenditures. For investment projects, we will adjust the timing of implementation by considering necessity and urgency, thereby striving to ensure the sustainability of municipal finances."

Meanwhile, the total budget for Gwangju City's 2024 general and special account revenue and expenditure amounted to 8.08817 trillion won, a 3.5% increase from the previous year. Expenditures totaled about 7.6 trillion won, resulting in a surplus of about 48 million won. The Gwangju City Council Special Committee on Budget and Accounts is scheduled to review and approve the settlement bill on June 12.

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