Korean gov't debt to GDP ratio to near 60% by 2029: IMF

Economy

Published: 18 Apr. 2024, 18:31

Korean gov't debt to GDP ratio to near 60% by 2029: IMF

The International Monetary Fund (IMF) logo is seen outside the agency's headquarters in Washington on September 4, 2018. [REUTERS/YONHAP]

Korea’s general government gross debt will reach almost 60 percent of its GDP by 2029, the International Monetary Fund (IMF) said Wednesday.

The country's general government gross debt reached 55.2 percent of its GDP last year, an on-year increase of 1.4 percentage points, according to the IMF's Fiscal Monitor report.

The ratio broke 50 percent in 2021 following the Covid-19 pandemic.

The figure is lower than those of other Group of 7 nations, including Japan (252.4 percent), Italy (137.3 percent), the United States (122.1 percent), France (110.6 percent) and Canada (107.1 percent).

The organization predicts that Korea’s figure will increase to 56.6 percent this year and 57.3 percent next year before reaching 59.4 percent in 2029.

The IMF also noted the rapid growth of global public debt.

“Global public debt is projected to approach 100 percent of GDP by the end of the decade,” the IMF said. “This rise in global public debt is primarily driven by China and the United States, where public debt is now higher and is expected to grow faster than prepandemic projections.”

It added, “Loose fiscal policy in the United States exerts upward pressure on global interest rates and the dollar. It pushes up funding costs in the rest of the world, thereby exacerbating existing fragilities and risks.”

The modest fiscal tightening projected across countries will be “insufficient” to stabilize public debt, according to the IMF.

BY JIN MIN-JI [jin.minji@joongang.co.kr]