] The South Korean government will keep the ratio of national debt to gross domestic product at 45 percent or lower, starting next year, the Finance Ministry said on Oct. 25.
The new state budget management act, which was introduced in August as part of efforts to maintain sound fiscal status, was approved by the Cabinet and will be submitted to the National Assembly, according to the ministry.
Under the law, the government has to comply with a debt-GDP ratio of 45 percent and the balance of the government budget-GDP ratio of 3 percent in any circumstances.
The ministry said it has drawn up the new state budget management act in order to deal with the national finances more effectively in the face of low economic growth and an aging population.
South Korea’s national debt accounts for an estimated 40.4 percent of the GDP for 2017, up from 39.3 percent for 2016 amid expansionary fiscal policies.