Deficit Debt to Surpass 1,000 Trillion Won Next Year... National Debt to Increase by 374 Trillion Won Over Four Years

National Assembly Budget Office Budget Analysis
Interest Expenditures Projected to Reach 42 Trillion Won by 2029

As the government shifts to an expansionary fiscal policy starting next year, deficit debt that must be repaid with taxpayer money is projected to exceed 1,000 trillion won.

According to the "2026 Budget Bill Analysis" published by the National Assembly Budget Office on November 3, national debt is expected to rise from 1,415 trillion won next year to 1,789 trillion won by 2029. This represents an increase of 374 trillion won over the next four years. Notably, the increase in national debt will be driven mainly by deficit debt. Deficit debt refers to liabilities for which the government has no corresponding assets, requiring repayment through taxpayer funds, with government bonds being a typical example.

Trends in National Debt and Deficit and Financial Liabilities. Provided by the National Assembly Budget Office

The volume of deficit debt is expected to surpass 1,000 trillion won, rising from 925 trillion won this year to 1,030 trillion won next year. With an average annual growth rate of 10.2%, it is projected to reach 1,363 trillion won by 2029. As a result, the proportion of deficit debt within total national debt is expected to increase from 71.0% in 2025 to 76.2% in 2029. This indicates not only a quantitative increase in national debt, but also a qualitative deterioration due to the expansion of deficit bond issuance and other factors.

The increase in deficit debt leads to higher interest expenses. According to the National Fiscal Management Plan analyzed by the National Assembly Budget Office, interest payments are expected to rise from 30 trillion won in 2025 to 42 trillion won by 2029. This is the highest growth rate (an average annual increase of 9.1%) among mandatory expenditures, which are budget items that must be executed automatically in accordance with laws and regulations, regardless of government policy decisions. The National Assembly Budget Office advised, "The increase in interest expenses intensifies fiscal rigidity," and recommended, "Plans to secure fiscal sustainability should be prepared, taking into account the rising expenditures on public pensions and basic pensions due to rapid population aging."

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