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The government and ruling party decided to issue an additional 10 trillion won in government bonds while organizing an (additional) 15 trillion won budget for the fourth payment of the disaster grant. Coupled with the forecast that Narat’s ‘1 trillion won era of debt’ will come within this year, some point out that the recent rapid rise in national debt is concerning.
The government decided to spend 15 trillion won in addition to 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 additional budget, It is the third largest since the third supplement last year (23 trillion won) and 2009 (17 trillion won), the global financial crisis. However, of the 15 trillion won of this extra, 9 trillion won was obtained through the issuance of government bonds, which intact led to an increase in the 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 presented to the National Assembly last year and this year’s additional national debt are added together, Narat’s debt will increase to 191.2 trillion won next year and is expected to increase to 900 billion won.
However, if additional budgets are organized several times this year on a similar scale to last year, the time when the national debt will rise to 1,000 trillion won may come within this year. This possibility becomes even greater if national disaster support payments become a reality.
Vice Premier Hong Nam-ki and the Minister of Equipment and Materials posted a Facebook post on the day of the announcement of the fourth personalized damage support countermeasure, showing concerns about fiscal soundness.
Vice Premier Hong said: “The absolute level of the national debt index is still lower than the national average of the Organization for Economic Cooperation and Development (OECD), but the pace of debt growth is by no means dependable”.
Professor Yeom Myung-bae from 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 by the people in the end. He noted 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 must consider the sustainability of our finances ”.
Reporter Kwak Dong-hoon [email protected]
