Published : 2014-02-14 14:03
Updated : 2014-02-14 14:37
South Korea's public sector debt amounted to more than 820 trillion won ($768.9 billion) in 2012, government data showed Friday, renewing worries over the financial health of public organizations.
According to the data provided by the finance ministry, the public sector debt owed by central and provincial governments and non-financial state-run enterprises came to 821.1 trillion won as of end-2012. The amount represents 64.5 percent of the country's gross domestic product.
No comparison figures were available since this is a new set of public debt-related data from the ministry.
The national liabilities -- money borrowed by central and regional governments -- stood at 443.1 trillion won. If debt held by non-profit public organizations is included, the amount rises to 504.6 trillion won.
In accordance with international standards, the new data excluded money borrowed by financial companies, including the Korea Development Bank and the Industrial Bank of Korea, since their deposits could be counted as debt, distorting the overall debt situations, the ministry said. It also excluded the money lent and borrowed in the public sector to avoid double counting.
The ministry said it decided to change the means of calculation in order to give a clearer, more accurate picture of the debt situations in the public sector.
"The reason why we unveiled the debt figures based on the latest international guidelines is because we intend to monitor pre-emptively the possibility of a fiscal risk in the public sector turning into a fiscal burden going forward," the ministry said.
"We also intend to contribute to the normalization of the public sector by transparently disclosing public sector debt, including debt owed by state-run enterprises."
The country's public organizations, including state-run enterprises, are under fire for their lax management and generous benefits to workers despite their growing debt stemming from loss-making business.
This worsening debt problem prompted the government to push for comprehensive public sector reform, recently urging them to sell their non-core assets, reduce excessive benefits to workers and streamline their overall business structure. (Yonhap)