By Choi Kyong-ae
Korea's sovereign debt is expected to reach 650 trillion won ($540 billion) by December because of increased government spending to stimulate the economy, government figures showed Sunday.
This is a sharp jump from an estimated 595 trillion won in sovereign debt for the whole of 2015, according to the National Assembly Budget Office (NABO). Given the pace of growth, the national debt is widely expected to hit 700 trillion won by the end of 2017.
The government has continued to inject money to jump-start nearly moribund consumer sentiment in recent years. But its stimulus packages have not worked as well as expected. Increased welfare spending for elderly retired people amid an aging population is emerging as a major burden to the government's budget, economists said.
The ratio of sovereign debt to gross domestic product (GDP) is likely to top 40 percent for the first time this year. If the government fails to control its budget plans effectively in the long term, the national debt ratio to GDP may soar to 62 percent in 2060, according to the government's long-term fiscal outlook released late last year.
The ministry acknowledged the national debt in Asia's fourth-biggest economy was rising, but said it could be controlled in a safe and stable manner compared to major advanced economies.
In the nine years through 2015, the average debt to GDP ratio of Organization for Economic Cooperation and Development (OECD) countries jumped to 115 percent from 74 percent. But Korea's debt to GDP rose a mere 9.8 percent during the same period, the ministry said.
The government also said Korea's successful management of national debt was behind Moody's Investor Service's upgrading the country's sovereign rating to a record high of Aa2 from Aa3 last December.
But a NABO official warned, "Rapid aging could further push up the country's spending on welfare and medical programs for senior citizens although the current ratio of national debt to GDP is relatively lower than advanced countries."
In 2010, 7 percent of Korea's 51 million population was aged over 65. By 2017, this will have soared to 14 percent. By 2026, 20 percent of the population will be aged over 65, according to government data.
Under the government's 2015 to 19 fiscal forecast, national debt is expected to reach 693 trillion won in 2017, 732 trillion won in 2018 and 761 trillion won in 2019.
Korea's sovereign debt is expected to reach 650 trillion won ($540 billion) by December because of increased government spending to stimulate the economy, government figures showed Sunday.
This is a sharp jump from an estimated 595 trillion won in sovereign debt for the whole of 2015, according to the National Assembly Budget Office (NABO). Given the pace of growth, the national debt is widely expected to hit 700 trillion won by the end of 2017.
The government has continued to inject money to jump-start nearly moribund consumer sentiment in recent years. But its stimulus packages have not worked as well as expected. Increased welfare spending for elderly retired people amid an aging population is emerging as a major burden to the government's budget, economists said.
The ratio of sovereign debt to gross domestic product (GDP) is likely to top 40 percent for the first time this year. If the government fails to control its budget plans effectively in the long term, the national debt ratio to GDP may soar to 62 percent in 2060, according to the government's long-term fiscal outlook released late last year.
The ministry acknowledged the national debt in Asia's fourth-biggest economy was rising, but said it could be controlled in a safe and stable manner compared to major advanced economies.
In the nine years through 2015, the average debt to GDP ratio of Organization for Economic Cooperation and Development (OECD) countries jumped to 115 percent from 74 percent. But Korea's debt to GDP rose a mere 9.8 percent during the same period, the ministry said.
The government also said Korea's successful management of national debt was behind Moody's Investor Service's upgrading the country's sovereign rating to a record high of Aa2 from Aa3 last December.
But a NABO official warned, "Rapid aging could further push up the country's spending on welfare and medical programs for senior citizens although the current ratio of national debt to GDP is relatively lower than advanced countries."
In 2010, 7 percent of Korea's 51 million population was aged over 65. By 2017, this will have soared to 14 percent. By 2026, 20 percent of the population will be aged over 65, according to government data.
Under the government's 2015 to 19 fiscal forecast, national debt is expected to reach 693 trillion won in 2017, 732 trillion won in 2018 and 761 trillion won in 2019.
![[INTERVIEW] Ecolab helps Korean partners profit from ESG management](https://img.koreatimes.co.kr/upload/thumbnailV2/7a924189dbb7426ab12275ba98702309.jpg/dims/resize/178/optimize)
![[ANALYSIS] Has N. Korean leader's daughter been confirmed as heir apparent?](https://img.koreatimes.co.kr/upload/thumbnailV2/e65868a1b5834cc3aef853378637d1fd.jpg/dims/resize/178/optimize)
![[INTERVIEW] 'Lifeline for migrant workers in Korea' - Rev. Kim fights for foreign employees' rights](https://img.koreatimes.co.kr/upload/thumbnailV2/8fb4b5d381da49df90276394550f2889.jpg/dims/resize/178/optimize)
![[INTERVIEW] Korea to work with US, Japan to fight climate change](https://img.koreatimes.co.kr/upload/thumbnailV2/800d9054a14b4a0f9cc576366cc1b914.jpg/dims/resize/178/optimize)
![[REVIEW] Preview gala sets stage for grand premiere of 'La Rose de Versailles' musical](https://img.koreatimes.co.kr/upload/thumbnailV2/c7528d2924cd43c8a469cd46e6f56127.jpg/dims/resize/178/optimize)
