South Korea Expected to Keep National Debt Ratio under 39 % by End of 2016

South Korea is expected to keep the ratio of national debt against the gross domestic product (GDP) under 39% by the end of the year on reduced Treasury's and a rise in tax revenue, a senior finance ministry official said.

    The national debt-GDP ratio will be managed under 39% at the end of this year, and 40% at the end of next year," South Korean Deputy Finance Minister for Fiscal Affairs Cho Kyoo-hong said. "The issuance of government bonds will be reduced to 101.2 trillion won (US$86.5 billion) this year, 8.9 trillion won less than the originally planned 110 trillion won." The ratio is slightly lower than the government's earlier forecast of 40.1% for 2016, on the back of a rise in tax revenues.    

    The government collected 189.1 trillion won of taxes through September, achieving 81.3% of the annual target for all of 2016, up by 4.1 percentage points more than the same period last year.

    The South Korean government has focused on maintaining sound fiscal status in the face of a protracted economic slowdown and a rapidly aging population.

    Under the new state budget management act, which was introduced in August, the government has to comply with a debt-GDP ratio of 45% in any circumstance.