OECD lauds Korea’s fiscal position since 2008 crisis

The Organization for Economic Co-operation and Development (OECD) picked Korea as one of the nine countries that don’t need further efforts to improve their fiscal soundness in an annual report released last week.

The report, entitled of “The State of Public Finances 2015” and released to public on Friday, said Korea was among nine countries that “did not have significant fiscal consolidation needs,” citing low deficits and low gross debt-to-GDP ratio.

The other eight countries were Australia, Chile, Estonia, Luxembourg, Norway, Sweden, Switzerland and Turkey, the report said.

Unlike other countries that suffered severe fiscal shocks from 2007 to 2009, these countries underwent “a relatively mild fiscal adjustment,” and their fiscal surpluses before the global financial meltdown was sound enough to help them endure without severe fiscal measures, according to the report.

Korea’s debt-to-GDP ratio has reached nearly 40 percent, the latest government data showed, but some analysts in Seoul say the figure could rise to 80 percent if high debts held by state-run companies were included. Seoul officials are also assuming more debt in case of unification with the impoverished North Korea.