Financial authorities said Tuesday that the government would have to pay about 20.3 trillion won ($18.9 billion) in debt interest this year.
Financial analysts said the government’s high interest payments may elevate concerns about the nation’s fiscal soundness.
The interest payment for the government debt this year rose to 20.3 trillion won ($18.9 billion), or about 7.7 percent of this year’s total state revenue, the Financial Services Commission said in a report to ruling Saenuri Party lawmaker Lee Han-sung.
This means about 404,000 won per capita is spent on repaying the interest of the government debt in the country.
The interest value rose about 6.3 percent from last year’s 19.1 trillion won, in reflection of the country’s rising sovereign debt. Sovereign debt is considered an effective indictor of the country’s fiscal soundness in the long term.
This year’s government debt is expected to reach about 480.3 trillion won, as the government issued additional sovereign bonds to make the largest supplementary budget in four years.
The government debt was 11.4 trillion won in 2006, 13.4 trillion won in 2008, 17.1 trillion won in 2010 and 19.1 trillion won in 2012, according to the FSC’s report.
The increase was attributed to the government’s increased borrowing in recent years to cover spending for measures to cope with the prolonged economic slowdown.
Rep. Lee said that the central government must strengthen its debt management.
By Chung Joo-won (email@example.com