As the government prepared a supplementary budget to restore damage from wildfires and respond to trade and AI issues, the 'deficit debt' that must be repaid with taxpayer money has nearly reached 900 trillion won.
The growth rate compared to the previous year has also risen to the 10% range for the first time in three years since the impact of COVID-19 in 2022.
The proportion of deficit debt in government debt has also approached 70%.
According to the Ministry of Economy and Finance on the 20th, the government announced that the government debt will increase by 6 trillion won as it prepares a supplementary budget of 12.2 trillion won.
The increasing debt is all deficit debt. Deficit debt refers to debt that must be repaid using taxes and other resources collected from the public, as there are insufficient or no corresponding assets.
This contrasts with financial debts that are self-repayable, such as foreign exchange stabilization fund bonds and housing bonds, which have corresponding assets.
With this supplementary budget, the deficit debt for this year will be 885.4 trillion won, marking an 11.8% increase compared to last year's 792.3 trillion won.
Deficit debt has steadily increased since surpassing 300 trillion won in 2015, reaching 407.6 trillion won in 2019.
From 2020 to 2022, during the presidency of Moon Jae-in, it recorded double-digit growth rates every year, increasing rapidly.
After the inauguration of the Yoon Suk-yeol government, which emphasized fiscal soundness, the growth rate of deficit debt fell to single digits, but as cumulative tax revenue losses combined with the supplementary budget, it has returned to the 10% range this year.
The proportion of deficit debt in total government debt (1,279.4 trillion won) has also increased to 69.2%, up from last year's 66.3%.
If the newly formed government after the June 3 presidential election proceeds with additional supplementary budgets citing implementation of national tasks, the scale of deficit debt is expected to grow larger. If the size of the second supplementary budget exceeds 34 trillion won, the proportion of deficit debt compared to total government debt will exceed 70%. If the size of the second supplementary budget exceeds 42.3 trillion won, the ratio of government debt to gross domestic product (GDP) will also exceed 50%.