[ad_1]
On the 7th, President Moon Jae-in revealed the principle of selective payment of the second disaster grant, saying, “Actually, the financial difficulties are great.” President Moon said at a meeting of the Blue House chief and advisers that day: “It makes sense to provide disaster assistance to all citizens, even if it is a small amount.” However, referring to financial difficulties, he said that “the financial resources for the fourth supplementary administration have no choice but to cover them with the issuance of government bonds.”
President Moon said, “We are still going through the crown crisis situation, and we cannot help but take into account the situation that we cannot know when the end will be.” “It is an inevitable choice.”
President Moon has emphasized the ‘relative strength’ of government finances when compared to other OECD (Organization for Economic Cooperation and Development) countries. It is unusual for President Moon to mention “financial difficulties” on this day.
◇ The national debt ratio is approaching 44% this year, 46.7% next year, 99% in 2045
The reason President Moon spoke of “financial difficulties” is discussed as because debt is snowballing. Including the Corona Disaster Grant, the government organized an additional budget for corrections only four times this year, and announced a ‘super budget plan’ worth 556 trillion won next year. In this case, the relationship between the national debt and GDP next year is 46.7%, 3.2 percentage points more than this year. The fiscal deficit is 10.97 trillion won, which is equivalent to 5.4% of GDP. Tax revenue is sluggish due to the coronavirus, as spending spikes to the highest level in history.
The national debt-to-GDP ratio is deteriorating rapidly compared to the forecast in President Moon’s correction speech last year. In a speech to the National Assembly in October last year, President Moon said: “Korea’s fiscal and economic power is very strong” and “next year (2020) the national debt ratio will not exceed 40% of GDP. “. “It is incomparably low compared to the OECD average of 110%, and it is the highest level in terms of fiscal soundness,” he emphasized in ‘expanded finance’.
However, this year’s national debt ratio has risen to a record 43.5% since the third round of supplements. President Moon said, “It does not exceed 40%,” but it has already exceeded that level. Also, if the size of the fourth supplemental budget is 7.5 trillion won, the national debt this year will increase to 84.89 trillion won. The public debt / GDP ratio reached 43.9%, reaching 44%.
According to the results of long-term fiscal projections released by the Ministry of Strategy and Finance on the 2nd, Korea’s national debt-to-GDP ratio is expected to rise to 99% by 2045 due to the consequences of the low rate. birth rate and the aging of the population.
