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Finance Minister vows to keep nation’s debt under W700tr

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)
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 (consnow@heraldcorp.com)
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