Input 2021.04.06 10:00
State debt of 846.9 trillion won… 44% of national debt ratio
National debt surged by 123 trillion won a year for the first time since the founding of the country
“After next year, we should focus on improving government spending efficiency and fiscal soundness.”
Last year, tax revenues decreased sharply due to the prolonged economic recession, but the total fiscal balance, which subtracted expenditures from the government’s income, recorded a deficit of 71.2 trillion won as the government’s revenues were subtracted from expenditures as the government’s revenues were subtracted from expenditures due to recurring corona emergency disaster subsidies.
Excluding the balance of social security funds such as the national pension, the management target balance was a deficit of 112 trillion won. Both the combined fiscal and managed fiscal deficits surged close to 60 trillion won compared to the previous year, soaring to an all-time high. The deficit is growing like a snowball in the household account book of the country’s housekeeper.
Accordingly, the national debt, including the debt of the central and local governments, was totaled to 846 trillion won last year, an increase of 12.3 trillion won compared to the previous year. The ratio of national debt to gross domestic product (GDP) was 44.0%, up 6.3%P (points) from 2019.
Last year, the national debt (debt in financial statements) reached 1985 trillion and 300 billion won, reaching 200 billion won for the first time ever. Compared to the previous year (1743 trillion won), it increased 241.6 trillion won. The national debt is the sum of the debts of the central government and local governments, the management funds of public institutions, and the pension burden (pension provisions) to be paid to civil servants and soldiers.
According to the National Settlement Report, the central government’s debt was 819 trillion won last year, and the local government’s debt was 2.7 trillion won, respectively. The central government’s debt increased by 12,200 trillion won from the previous year, and the local government’s debt increased by 3.4 trillion won from the previous year. When the debts of the central and local governments were added, it was 84.89 trillion won, an increase of 12.3 trillion won from the previous year. It is the first time that national debt has increased by more than 123 trillion won a year. Until now, the largest increase was 58.3 trillion won in 2015.
The ratio of debt to gross domestic product (GDP) reached 44.0%, an increase of 6.3 percentage points from the previous year. Last year, the nominal GDP was 1924 trillion won.
If the remaining debt items in the accrual method, such as the pension burden (pension provision) 1044 trillion won to be paid to public officials and military personnel, and the accrual method such as guarantees and insurance provisions, and BTL, are reflected, the entire country The debt (debt in the financial statements) amounted to 1985 trillion and 300 billion won.
The reason for the increase in national debt is, first of all, the government’s issuance of government bonds to support the expansion of fiscal management, such as preparing four additional correction budgets (67 trillion won) to overcome the crisis caused by the spread of the novel coronavirus infection (Corona 19). Because I increased it. In addition, as housing transactions increased, national housing bonds also increased, and the balance of foreign exchange equilibrium fund bonds to stabilize the foreign exchange market increased from last year.
Accordingly, last year, the government issued 72.8 trillion won of national treasury bonds, 78.900 trillion won of national housing bonds, and 9.5 trillion won of foreign exchange equilibrium fund bonds, respectively. The total amount of bonds issued last year was 81.12 trillion won, an increase of 119 trillion won from the previous year.
The combined fiscal balance, which is the difference between fiscal income and expenditure collected by the government over the past year, recorded a deficit of 71.2 trillion won. It is the largest ever. Previously, the largest deficit was 18,800 billion won in 1998 at the time of the IMF foreign exchange crisis and 17.6 trillion won in 2009 at the time of the global financial crisis.
The administrative fiscal balance, which shows the state of the government’s fiscal soundness, recorded a deficit of 112 trillion won. The size of the deficit increased by 57.5 trillion won from the previous year.
The ratio of the managed fiscal deficit to GDP recorded -5.8%. It is also the largest deficit in history. So far, the largest scale was -4.6% in 1998 during the IMF and -3.6% in 2009 during the global financial crisis.
Meanwhile, last year’s general and special accounts combined total revenue of 465 trillion won and total revenue of 45.38 trillion won. Among the taxes collected, world surplus, which was left unused, amounted to 9.4 trillion won (excluding the amount carried over 2.30 trillion won).
So-young Kim, a professor of economics at Seoul National University, said, “If the expansionary fiscal expenditure of last year and this year, which was implemented to overcome the corona, continues after next year, it could cause a very big problem in fiscal soundness.” You have to show your plan,” he pointed out. He added, “It is necessary to devise a plan to selectively support the corona victims while increasing expenditure efficiency.”