October 14, 2021 08:58
The International Monetary Fund on Wednesday warned that Korea's sovereign debt ratio is growing at the fastest rate among 35 advanced countries.
In its Fiscal Monitor report, the IMF said the ratio of Korea's gross debt to GDP will surge from 47.9 percent in 2020 to 66.7 percent in 2026, the biggest increase among the 35 advanced countries.
The Czech Republic is expected to rank second with a rise from 37.8 percent 53.7 percent over the period and Malta third with 53.3 percent to 65.4 percent.
The average is expected to edge up from 120.1 percent to 121.1 percent.
But the IMF pointed out, "Advanced economies and China contributed more than 90 percent to the accumulation of worldwide debt in 2020. The remaining emerging markets and low-income developing countries contributed only around seven percent."
However, advanced economies are also projected to recover even though fiscal support persists as spending and revenues gradually approach pre-COVID levels. "In some countries the debt ratio is expected to remain broadly stable" or, in a country like Korea, to continue rising.
According to the Ministry of Economy and Finance here, Korea's sovereign debt will rise to W1,068.3 trillion next year, surpassing 1 quadrillion for the first time (US$1=W1,193). It stood at just W660.2 trillion in 2017, when President Moon Jae-in took office.
In ranking terms, Korea's fiscal debt is expected to rise from 24th out of the 35 countries in 2020 to 16th in 2026.
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