Debt Crisis Unlikely for Korea as Ratio Remains Well Below Global Red Flags (Yonhap)
SEOUL, Sept. 25 (Korea Bizwire) — The likelihood of South Korea facing a debt problem as seen in some European economies remains “limited,” a local analyst said Thursday, dismissing concerns that President Lee Jae Myung’s expansionary fiscal policy may strain the local economy.
Ahn Jae-kyun, an analyst at Korea Investment & Securities Co., made the remarks at a press conference held at the Korea Exchange, the country’s leading bourse operator.
“South Korea, too, is making efforts to reform its low-growth rate and economic structure by expanding government spending,” Ahn said.
“There are looming concerns such efforts could increase the government’s debt ratio. But looking at the current situation, the figure will still be lower than the International Monetary Fund’s (IMF) recommendation of 60 to 70 percent,” he added.
The national debt-to-gross domestic product (GDP) ratio is widely used as a key indicator of a country’s fiscal health, with a lower ratio generally giving governments more flexibility in expanding expenditures.
South Korea’s debt-to-GDP ratio had stood at 47.2 percent as of end-March, according to data from the Bank of International Settlements.
(Yonhap)
