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South Korea’s public sector debt grew by the largest amount to exceed the 1,200 trillion-won ($1 trillion) mark for the first time last year, the finance ministry said Thursday.
The country’s public sector debt, known as D3, came to 1,280 trillion won last year, up 147.4 trillion won from the previous year, according to the data from the Ministry of Economy and Finance.
It marked the largest on-year increase and the highest level since 2011 when the government began compiling related data.
D3 covers general government debts and debt holding of non-financial state-funded firms.
The D3 size was equivalent to 66.2 percent of the country’s gross domestic product (GDP) last year, up from 58.9 percent in 2019.
South Korea’s general government debt (D2) stood at a record high of 945.1 trillion won last year, up 134.4 trillion won from a year earlier. D2 covers debt by the central and provincial governments and nonprofit public institutions.
The country’s D2-to-GDP ratio came to 48.9 percent last year, up from 42.1 percent in 2019.
The central government debt grew 127.2 trillion won on-year last year, accounting for the bulk of the D2 growth. Of the amount, the sale of Treasurys was valued at 116.9 trillion won.
South Korea sharply increased fiscal spending last year to cope with the fallout of the COVID-19 pandemic.
Last year, the country’s national debt, known as D1, grew by the largest-ever amount of 123.7 trillion won to a then record high of 846.9 trillion won. D1 covers debts by the central and provincial governments.
South Korea’s fiscal health remains sound compared with other major economies, but its national debt is growing at an alarming pace.
The sovereign debt is expected to reach 1,064.4 trillion won next year, up from an estimate of 965.3 trillion won for this year, according to the finance ministry. (Yonhap)
Public sector debt tops 1,200 tln-won mark last year
Source: Buhay Kapa PH
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