The Korea Times
amn_close.png
amn_bl.png
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
amn_bl.png
Business
  • Tech
  • Bio
  • Companies
  • World Expo 2030
amn_bl.png
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
amn_bl.png
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
amn_bl.png
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
amn_bl.png
Entertainment & Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
amn_bl.png
Sports
  • Hangzhou Asian Games
amn_bl.png
World
  • SCMP
  • Asia
amn_bl.png
Video
  • Korean Storytellers
  • POPKORN
  • Culture
  • People
  • News
amn_bl.png
Photos
  • Photo News
  • Darkroom
amn_NK.png amn_DR.png amn_LK.png amn_LE.png
  • bt_fb_on_2022.svgbt_fb_over_2022.svg
  • bt_X_on_2023.svgbt_X_over_2023.svg
  • bt_youtube_on_2022.svgbt_youtube_over_2022.svg
  • bt_instagram_on_2022.svgbt_instagram_over_2022.svg
The Korea Times
amn_close.png
amn_bl.png
National
  • Politics
  • Foreign Affairs
  • Multicultural Community
  • Defense
  • Environment & Animals
  • Law & Crime
  • Society
  • Health & Science
amn_bl.png
Business
  • Tech
  • Bio
  • Companies
  • World Expo 2030
amn_bl.png
Finance
  • Companies
  • Economy
  • Markets
  • Cryptocurrency
amn_bl.png
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
amn_bl.png
Lifestyle
  • Travel & Food
  • Trends
  • People & Events
  • Books
  • Around Town
  • Fortune Telling
amn_bl.png
Entertainment & Arts
  • K-pop
  • Films
  • Shows & Dramas
  • Music
  • Theater & Others
amn_bl.png
Sports
  • Hangzhou Asian Games
amn_bl.png
World
  • SCMP
  • Asia
amn_bl.png
Video
  • Korean Storytellers
  • POPKORN
  • Culture
  • People
  • News
amn_bl.png
Photos
  • Photo News
  • Darkroom
amn_NK.png amn_DR.png amn_LK.png amn_LE.png
  • bt_fb_on_2022.svgbt_fb_over_2022.svg
  • bt_X_on_2023.svgbt_X_over_2023.svg
  • bt_youtube_on_2022.svgbt_youtube_over_2022.svg
  • bt_instagram_on_2022.svgbt_instagram_over_2022.svg
  • Login
  • Register
  • Login
  • Register
  • The Korea Times
  • search
  • all menu
  • Login
  • Subscribe
  • Photos
  • Video
  • World
  • Sports
  • Opinion
  • Entertainment & Art
  • Lifestyle
  • Finance
  • Business
  • National
  • North Korea
  • 1

    Korea to expand visa benefits to accelerate inbound tourism

  • 3

    Why Korean shoppers flock to Chinese e-commerce sites

  • 5

    Will Korea avoid hard landing in housing market?

  • 7

    Seoul-Moscow ties likely stuck in limbo amid blame game

  • 9

    Footballer Hwang's sister-in-law indicted for disclosing his private videos

  • 11

    '12.12: The Day' goes strong at box office, attracts younger generation

  • 13

    CITYSCAPESDrone pilot explores Korea's hardest-to-reach places

  • 15

    K-pop's appeal reflected in global accolades

  • 17

    Love and hope in Korea

  • 19

    LG Energy Solution wins battery module supply deal in Poland

  • 2

    Seoul awards honorary citizenship to outstanding foreign residents

  • 4

    Israeli TV shows footage of stripped detainees in Gaza

  • 6

    INTERVIEWEx-NIS chief urges politicians to stop misusing spy agency

  • 8

    'British Spider-Man' ends 6-month stay in Korea

  • 10

    Hyundai Motor hires former US Ambassador to Korea Sung Kim as adviser

  • 12

    'Squid Game' director promises 'deeper story' with new characters, games for Season 2

  • 14

    Pro-labor 'yellow envelope bill' scrapped in revote after Yoon's veto

  • 16

    US defense policy bill calls for maintaining 28,500 US troops in Korea

  • 18

    Hanwha signs $2.4 bil. deal to export infantry fighting vehicles to Australia

  • 20

    NK urges people to follow leader Kim Jong-un in climbing Mount Paektu

Close scrollclosebutton

Close for 24 hours

Open
  • The Korea Times
  • search
  • all menu
  • Login
  • Subscribe
  • Photos
  • Video
  • World
  • Sports
  • Opinion
  • Entertainment & Art
  • Lifestyle
  • Finance
  • Business
  • National
  • North Korea
Opinion
  • Editorial
  • Columns
  • Thoughts of the Times
  • Cartoon
  • Today in History
  • Blogs
  • Tribune Service
  • Blondie & Garfield
  • Letter to the Editor
Sun, December 10, 2023 | 15:37
Editorial
Regain fiscal health
Posted : 2022-04-07 17:05
Updated : 2022-04-07 20:05
Print PreviewPrint Preview
Font Size UpFont Size Up
Font Size DownFont Size Down
  • facebook
  • twitter
  • kakaolink
  • whatsapp
  • reddit
  • mailto
  • link
Concerns grow over rapid indebtedness

The country has plunged deeper into debt, heightening concerns about its fiscal soundness. It may face devastating consequences unless it takes bold measures to reduce the debt. That's why the incoming Yoon Suk-yeol administration needs to shift to fiscal tightening away from the Moon Jae-in government's fiscal easing.

Korea's national debt, which comprises bond issues and borrowings by central and provincial governments, totaled 967.2 trillion won ($796 billion) last year, up 14 percent from 2020, according to a report by the Ministry of Economy and Finance. The debt growth rate is alarming even though the government had to expand its spending to cope with the economic fallout of the COVID-19 pandemic.

Last year, the Moon administration drew up two extra budgets amounting to 50 trillion won to provide financial support for businesses, particularly smaller ones and the self-employed, to make up for their losses caused by the pandemic. The sum came on top of the liberal government's annual mega-budget of 558 trillion won. This prompted the debt-to-GDP ratio to surge to 47 percent in 2021, up from 43.8 percent in 2020.

Making matters worse, the ratio is predicted to rise further to 50.1 percent this year, as the national debt is likely to reach 1,075 trillion won. Some economists forecast the ratio to surge to as high as 67 percent in 2026 if the rising debt trend continues. However, the Moon government has so far turned a deaf ear to critics' warnings against its spending spree.

It is not too much to say that the country is on the verge of falling into a debt trap. Many countries around the world are now turning to fiscal tightening to absorb excess liquidity created by fiscal and monetary easing amid the pandemic. Korea should follow suit before it's too late. The U.S. Federal Reserve has already begun winding down the quantitative easing program. It is now moving toward quantitative tightening while raising its key interest rate to tame soaring inflation.

Debt owed by consumers and businesses is also a cause for concern. Household debt hit a record high of 1,862 trillion won at the end of last year, while corporate debt totaled 2,361 trillion won. The state liabilities ― a total of bond issues, borrowings and future pension payments ― reached 2,196 trillion won in 2021, up 214.7 trillion won from 2020.

The president-elect should focus on reducing the growing national debt. His first Prime Minister-nominee Han Duck-soo said he would make efforts to regain fiscal soundness if his nomination is approved by the National Assembly. Yet what is worrisome is Yoon's push for an extra budget of 50 trillion won to keep his campaign promise to compensate small business owners and self-employed people for their losses arising from COVID-19 restrictions. Such a budget, which seems inevitable to help those hit hardest by the pandemic, could also increase the government debt and raise inflationary pressure.

Yoon and his economic team must do everything they can to restore fiscal health and reduce the skyrocketing household debt. They also need to tame inflation which surged to 4.1 percent year-on-year last month, the highest level in a decade. The country cannot enjoy sustainable growth without tackling the debt issue and keeping inflation in check.




 
wooribank
LG group
Top 10 Stories
1'British Spider-Man' ends 6-month stay in Korea 'British Spider-Man' ends 6-month stay in Korea
2Justice minister challenges opposition leader in polls for potential next president Justice minister challenges opposition leader in polls for potential next president
3Kim Bu-gwi, the tallest monk at Hwaeom Temple Kim Bu-gwi, the tallest monk at Hwaeom Temple
4Cadero Grip introduces hybrid golf grip product Cadero Grip introduces hybrid golf grip product
5German scholar lectures on 'Saving Confucius from Confucianism'German scholar lectures on 'Saving Confucius from Confucianism'
6N. Korea's fear over external info grows after Seoul's propaganda leaflets decisionN. Korea's fear over external info grows after Seoul's propaganda leaflets decision
7Hana Bank hosts foreign exchange quiz for employees Hana Bank hosts foreign exchange quiz for employees
8Hunting 'crow thief' on Korea's east coast in 1930s Hunting 'crow thief' on Korea's east coast in 1930s
9Eximbank teams up with US counterpart on decarbonization Eximbank teams up with US counterpart on decarbonization
10Doubts grow over shareholder activism on Samsung C&T Doubts grow over shareholder activism on Samsung C&T
Top 5 Entertainment News
1[INTERVIEW] How AmazeVR revolutionizes aespa's LYNK-POP concert INTERVIEWHow AmazeVR revolutionizes aespa's LYNK-POP concert
2'Dune: Part Two': most challenging but proud work, says director Denis Villeneuve 'Dune: Part Two': most challenging but proud work, says director Denis Villeneuve
3'12.12: The Day' goes strong at box office, attracts younger generation '12.12: The Day' goes strong at box office, attracts younger generation
4K-pop's appeal reflected in global accolades K-pop's appeal reflected in global accolades
5[REVIEW] Musical 'Monte Cristo' returns with riveting tale of vengeance, love REVIEWMusical 'Monte Cristo' returns with riveting tale of vengeance, love
DARKROOM
  • It's beginning to look a lot like Christmas

    It's beginning to look a lot like Christmas

  • 2023 Thanksgiving parade in NYC

    2023 Thanksgiving parade in NYC

  • Appreciation of autumn colors

    Appreciation of autumn colors

  • Our children deserve better

    Our children deserve better

  • Israel-Gaza conflict erupts into war

    Israel-Gaza conflict erupts into war

  • Turkey-Syria earthquake

    Turkey-Syria earthquake

  • Nepal plane crash

    Nepal plane crash

  • Brazil capital uprising

    Brazil capital uprising

  • Happy New Year 2023

    Happy New Year 2023

  • World Cup 2022 Final - Argentina vs France

    World Cup 2022 Final - Argentina vs France

CEO & Publisher: Oh Young-jin
Digital News Email: webmaster@koreatimes.co.kr
Tel: 02-724-2114
Online newspaper registration No: 서울,아52844
Date of registration: 2020.02.05
Masthead: The Korea Times
Copyright © koreatimes.co.kr. All rights reserved.
  • About Us
  • Introduction
  • History
  • Contact Us
  • Products & Services
  • Subscribe
  • E-paper
  • RSS Service
  • Content Sales
  • Site Map
  • Policy
  • Code of Ethics
  • Ombudsman
  • Privacy Statement
  • Terms of Service
  • Copyright Policy
  • Family Site
  • Hankook Ilbo
  • Dongwha Group