South Korea’s top fiscal policymaker said in parliament on Tuesday that the government would keep the national debt under 700 trillion won ($616.7 billion) in 2017, amid concerns over rising government expenditure.
Deputy Prime Minister for Economic Affairs and Finance Minister Kim Dong-yeon (right) sits in a parliamentary budget committee meeting Tuesday. (Yonhap)
In a meeting of the National Assembly’s Special Committee on Budget & Accounts, Deputy Prime Minister for Economic Affairs and Finance Minister Kim Dong-yeon said the volume of government debt is “manageable,” while adding the rise in debt is “inevitable.”
The government will issue deficit-covering bonds worth 20 trillion won in 2017 and 2018, which is about half of the amount in the previous two years.
Korea’s national debt hit a record-high of 627.1 trillion won in 2016, pushing the debt-to-gross domestic product up to 38.3 percent. The debt-to-GDP level will be under state control, as the government is closely watching fiscal soundness, he added.
In a bid to meet policy objectives such as state-run health care reform, President Moon Jae-in’s de facto transition team suggested a budget expansion by some 178 trillion won or 4.7 percent from a year prior.
“The expenditure increasing rate will be higher than the 4.7 percent suggested earlier, but not as high as 7 percent,” the minister added.
The 7 percent mark was one of Moon’s pledges during the election campaign period.
By Son Ji-hyoung (firstname.lastname@example.org