Korea Ranks 6th in Fiscal Health in G-20

By Kang Seung-woo

Staff Reporter

South Korea is expected to rank sixth among G-20 countries both in fiscal health and economic performance this year on the back of a fast economic rebound, according to the International Monetary Fund (IMF).

In a recent report on the financial soundness and economic growth potential of the G-20 countries, the organization said that Korea's debt-to-gross domestic product (GDP) ratio is expected to reach 33.3 percent in 2010, the sixth lowest among G-20 nations and well below the IMF's forecast average of 76.8 percent.

The country's fiscal soundness is predicted to improve further as the IMF reports that the ratio will decrease to 32.8 percent in 2011 and 26.2 percent in 2015, which compares to the ratio of 29.6 percent in 2007 before the global financial crisis hit the country.

Russia is forecast to have the healthiest fiscal condition, with the debt-to-GDP ratio of 8.1 percent, followed by Saudi Arabia (12.8), Australia (19.8), China (20) and Indonesia (27.5) to round out the top five.

As for this year's economic performance, China is likely to enjoy the highest growth of 10 percent, followed by India (8.8), Indonesia (6.0), Brazil (5.5), Turkey (5.2) and Korea (4.5). Next year, the South Korean economy will rise to 5 percent, behind China (9.9), India (8.4) and Indonesia (6.2).

Japan posted a whopping 227.1 percent in the debt-to-GDP ratio to sit in the cellar among the 20 emerging and developed countries and Italy, the United States, France and Canada did not have bright outlooks either, ranging from 118.6 to 83.3 percent.

In terms of fiscal soundness, Russia, Saudi Arabia, China, Australia and Indonesia are expected to stay ahead of Korea in 2011 and 2015, respectively, but Japan's situation is likely to become worse, when its ratio is expected to eventually reach 250 percent.

Mexico, Brazil and Saudi Arabia were also expected to grow more than 4 percent.

"The G-20 countries are focusing on fixing financial balance sheets in the wake of Greece's financial crisis," said an official of the Ministry of Strategy and Finance.