The Korean central government’s debt amounted to 425.1 trillion won ($373.3 billion) in 2012, up 22.3 trillion won from a year earlier, the Ministry of Strategy and Finance said Tuesday.

The central government’s debt accounted for 33.4 percent of the country’s gross domestic product.

The total state debt which includes regional governments’ preliminary debt estimation of 18.7 trillion won reached 443.8 trillion won, up 23.3 trillion won in the same period. This accounts for 35 percent of the GDP, worth 8.8 million won of debt per person.

The figure for total national debt, calculated under the “cash-based” accounting rule, will be finalized by the mid-accounting period in June, the ministry noted.

The rise in debt of the central government is primarily due to an increase in state bond issuances to finance its budget shortfall, as well as to fund the stabilization of the foreign exchange market, it said in a statement.

The Finance Ministry said that its debt remains at a safe level, noting that its debt in proportion to assets stood at 57.1 percent, far lower than that of advanced economies such as the U.S.’ 685.9 percent, Canada’s 250.8 percent and Australia’s 165.5 percent.

It also managed a surplus on revenue of 282.4 trillion won after spending 274.8 trillion won last year.

However, market analysts expect the government’s debt-to-GDP rate to rise, further burdening its capacity to balance its budget going forward as it plans to raise additional funds to finance welfare amid gloomy economic prospects this year.

The Finance Ministry has recently projected a 2.3 percent growth rate, down from the 3 percent initially estimated, with a tax revenue shortfall of about 6 trillion won.

This has led it to devise a supplementary budget, which may range from 10 trillion won to as high as 20 trillion won, already being contested among lawmakers over ways to come up with funding ― taxing the rich, a move favored by the opposition, or issuing state bonds.

“While a 10 trillion won package is expected, we believe the final package could be higher at 12 trillion won, five times larger than the supplementary package in 2004 after the credit-card crisis,” said Barclays in a report.

“Of this, we expect 7 trillion won to be centered on transfers to households for early education, child care, pension supplements and additional scholarships at state universities.”

Deputy Prime Minister and Finance Minister Hyun Oh-seok said that it will unveil stabilization measures for the bond market along with its supplementary budget plan.

By Park Hyong-ki (hkp@heraldcorp.com)