Published : 2013-08-18 11:53
Updated : 2013-08-18 11:53
South Korea's outstanding debt from bond issuance exceeded 800 trillion won (US$719 billion) for the first time in its history, related data showed Sunday, indicating that the government's expenditures have grown while tax revenues have significantly dropped.
According to the data from the Korea Financial Investment Association, the combined amount of state bonds that need to be repaid breached the 800 trillion won mark on Tuesday and reached 800.34 trillion won as of Friday.
The country's outstanding debt from state bonds more than doubled in less than six years from 395 trillion won at the end of 2007, the association said.
The amount includes debt special bonds that are mostly issued by state-run enterprises but are also backed by the government.
Still, it accounts for 63 percent of the country's annual gross domestic product and is 2.3 times the size of its total government spending this year.
The association attributed the rise in outstanding government debt partly to a drop in tax revenues.
The National Tax Service has said the government's tax collection dropped by 9.3 percent on-year to some 92.19 trillion won in the first half of the year, the lowest in three years.
The amount of national bonds issued up until Friday this year came to 90.26 trillion won, up 19.3 percent from the same period last year.
The amount of newly issued special bonds, on the other hand, plunged 16.6 percent on-year to some 57.56 trillion won.
"South Korea is said to be in a better condition than those facing a financial crisis with its national debt at about 35 percent of its GDP," said Moon Hong-cheol, a researcher from Dongbu Securities Co.
"But the amount does not include special bonds, which means once the de facto national debt from special bonds is included, the country may be in no better condition than Italy and France." (Yonhap news)