Korea's Debt Rises by W2 Million Every Second

  • By Kim Ji-seop

    December 02, 2019 12:09

    The per-capita debt shouldered by each Korean has surpassed W14 million due to the government’s increasing welfare payments (US$1=W1,180). The combined fiscal debt of the central and provincial governments is growing at a rate of W2 million per second.

    According to the National Assembly Budget Office on Sunday, Korea's per-capita debt stands at W14.2 million, almost double the figure in 2009. The office has been posting the increasing fiscal debt in real time since 2013 to warn the public.

    On Sunday, Korea's fiscal debt stood at W735.8 trillion, up more than W35 trillion since the end of last year. It is expected to swell to W741 trillion this year, or W771 trillion if the estimated net debt of regional governments is included.

    According to the office's estimates Korea's national debt will reach W1,490.6 trillion in 2028, and supposing the country's population will stand at 51.94 million people, per-capita debt will reach W28.7 million. That is twice the size of the per-capita debt at present. Per-capita debt doubled from W2.37 million in 2000 to W5.15 million in 2005 and surpassed W10 million in 2014.

    The reason behind the snowballing debt is that spending is growing faster than tax revenues. Korea's total earnings will grow 3.8 percent by 2028 but spending 4.5 percent.

    Cho Dong-keun, a Myongji University professor in Seoul, said, "If you include the debt of state-owned companies, Korea has already become vulnerable in terms of fiscal soundness. The National Assembly needs to put the brakes on excessive budget growth."

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