Korea’s national debt has followed an upward
trajectory since the 2008 financial crisis,. and now the interest on that debt has reached
a point where it could threaten the nation’s fiscal soundness.
Eoh Jin-joo has this report. With Korea’s national debt drawing ever nearer to 500 trillion
won,. that’s some 465 billion U.S. dollars,. the annual cost of just paying the interest
on that debt has also skyrocketed. Data released on Tuesday by Seoul’s Finance
Ministry and the National Assembly’s Strategy and Finance Committee shows. that the interest
on the government debt for this year has surpassed the 20-trillion-won mark, which is around
18-point-6 billion dollars. This means that every Korean is responsible
for over 370 dollars of interest for the government debt.
The government’s spending on interest payments has accounted for only around 6 percent of
its fiscal budget since 2006, but this percentage jumped to 7-point-7 percent this year.
Experts attribute the increase to a surge in government spending during the global financial
crisis. Before the 2008 crisis, the country’s national
debt was on a steady upward trajectory. But the figure began to shoot up in 2009 after
the crisis broke,. and has continued to go up since then.
By the year 2015, the national debt is expected to hit 475 billion dollars.
Analysts have voiced concerns that the growing interest payments could eventually push up
the government debt again, producing a negative effect on the country’s fiscal soundness,.
and they’ve called on the government to devise more plans to rein in the national debt.
Eoh Jin-joo, Arirang News.