The government and the ruling party decided to issue an additional 10 trillion won in government bonds while organizing a 15 trillion won (additional) budget for the 4th disaster subsidy payment. Along with the forecast that the’one thousand trillion won era in Narat debt’ will arrive within this year, some point out that the recent rapid increase in national debt is of concern.
The government decided to spend 15 trillion won in addition to the damage support measures amounting to 19 trillion won, which was decided at the State Council meeting on the 2nd. In terms of the size and expenditure of the supplement, it is the third largest in history after the third supplement last year (23 trillion won) and 2009 (17 trillion won), the global financial crisis. However, out of the 15 trillion won of this extra, 9 trillion won was raised by issuing government bonds, which intact led to an increase in national debt.
The government debt, which was 956 trillion won at the time of the budget, has increased to 965 trillion won.
If the government’s 2021-2024 National Fiscal Management Plan submitted to the National Assembly last year and the additional national debt this year are added together, the Narat debt will increase to 191.2 trillion won next year. It is expected to increase to 900 trillion won.
However, if additional budgets are organized several times this year on a similar scale to last year, the point in time that the national debt will increase to 1,000 trillion won may arrive within this year. This possibility becomes even greater if the national disaster support payments become a reality.
Deputy Prime Minister Hong Nam-ki and Minister of Equipment and Materials posted a post on Facebook on the day of the announcement of the 4th customized damage support countermeasures, showing concerns about the fiscal soundness.
Deputy Prime Minister Hong said, “The absolute level of the national debt ratio is still lower than the national average of the Organization for Economic Cooperation and Development (OECD), but the pace of debt growth is in no way reliable.”
Professor Yeom Myung-bae of Chungnam National University said, “If we add an additional supplement this year, we will exceed KRW 1,000 trillion in national debt. The rate of increase is too fast,” he said. “Even if the government changes, the debts already incurred must be paid off by the people in the end. He pointed out that it is quite anxious as it seems to be the keynote of’don’t think about tomorrow, let’s use it first’, although we need to consider the sustainability of our finances.”
Reporter Kwak Dong-hoon [email protected]