South Korea’s debt in the public sector, including borrowing by the government and state-run enterprises, exceeded 1,000 trillion won ($832 billion) as of the end of 2015, a government report showed Friday.
However, its rate to gross domestic product slightly fell by 0.1 percentage point to 64.4 percent in 2015 from a year earlier, the report by the Ministry of Strategy and Finance.
According to the government tally, the public sector debt, called D3 and which takes into account both general government and nonfinancial corporation debt and deducts internal transactions, rose to 1,003.5 trillion won as of the end of 2015.
The figure is a 4.8 percent gain, or 46.2 trillion won, from a year earlier.
General government debt, or D2, referring to that of the central and provincial governments, and nonprofit public institutions, was up by 55.6 trillion won to 676.2 trillion won over the cited period. Its ratio to GDP, often cited by foreign credit ratings as a benchmark for the government’s fiscal soundness, inched up 1.6 percentage points to 43.4 percent last year.
Of the 55.6 trillion won gain in the general government debt, 48.6 trillion won was incurred by government-issued bonds to stabilize the foreign exchange market and the rest, to cover the deficits in its general account, the ministry said.
National debt, or D1, stood at 591.5 trillion won, accounting for 37.9 percent of the GDP in 2015.
Debt at nonfinancial state-run firms inched down to 398.9 trillion won last year, with its GDP ratio shrinking by 1.9 percentage points to 25.6 percent.
The growth pace in both public sector debt and general government debt has slowed in 2015, compared to 2014, mainly due to improvements in financial performances at the state-run firms, the ministry said.
Korea’s general government debt-to-GDP ratio at 43.4 percent is relatively low compared to that of other Organization of Economic Cooperation and Development countries. The figure in Germany stands at 71 percent, the UK at 96 percent and the US at 126 percent, according to the ministry.
“The government plans to limit national debt-to-GDP ratio to the low-40 percent level by 2020,” the ministry said in a statement.
Korea’s sound position in public finances is often cited as a resilient factor in the faltering economy amid political risks over the impeachment of President Park Geun-hye, rising interest rates in the wake of the US Federal Reserve’s rate hike this month and the high level of household debt.