The government owes 10 trillion in 4th subsidy… Hong Nam-ki “I can’t be relieved of the speed of debt growth”

Deputy Prime Minister Hong Nam-ki and Minister of Strategy and Finance read the announcement at the detailed briefing of the 2021 Budget for Additional Revisions held at the Seoul Gwanghwamun Government Complex in Seoul on March 2nd. (Photo = Ministry of Strategy and Finance)

[세종=이데일리 원다연 기자] The government started to organize an additional budget for remediation of 15 trillion won (additional budget) to provide the 4th disaster support fund. It is the third time in history in terms of expenditure. The national debt has risen to 966 trillion won, and the era of 1,000 trillion won in debt is approaching. Deputy Prime Minister Hong Nam-ki and Minister of Strategy and Finance, who had been in conflict in the process of coordinating the size and target of the 4th subsidy with the Party, expressed concern about the rapidly growing debt of debt while emphasizing the role of finance in the event of a crisis for people’s livelihood.

Article 9.9 Appropriate for issuance of government bonds… Naratbit 966 trillion, the ratio of GDP to 48.2%

On the 2nd, the government decided at the State Council for the 4th damage support plan in response to Corona 19, worth KRW 19.500 trillion. The size of the first supplementary bill this year prepared by the government for the 4th subsidy, emergency employment countermeasures, vaccine purchase and vaccination measures, etc. is 15 trillion won.

The government announced that it would raise 9.9 trillion won through issuance of government bonds. In addition, the plan is to attract available financial resources such as global surplus such as special account for improvement of rural structure, special account for energy and support projects, surplus of the Bank of Korea, and funding. As it is an additional supplementary exercise at the beginning of the year, it does not include a plan to raise financial resources through expenditure restructuring.

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In addition, total expenditures this year, from 558 trillion won in this year’s budget, increased to 573 trillion won, and the combined fiscal balance (total income-total expenditure) deficit increased from 7.5 trillion won to 89 trillion won. The management fiscal deficit, which shows the actual fiscal situation, is 126 trillion won, a figure excluding social security fund expenditures from the integrated fiscal balance, an increase of 13 trillion won compared to the original budget. Both the integrated fiscal balance and the managed fiscal balance are the largest ever.

The national debt rose to 965 trillion and 900 billion won, and the ratio of national debt to GDP (gross domestic product) rose to 48.2%. The government initially predicted that the ratio of national debt to GDP at the time of budgeting this year was 47.3%.

However, the Ministry of Strategy and Finance explained that the increase in the national debt ratio due to the additional budget was 0.5% point, and the remaining 0.4% point was the effect of adjusting the GDP forecast. If the growth rate falls, the debt ratio rises even if the total amount of national debt remains the same. The government’s debt ratio has risen even further, reflecting the performance value of last year’s growth rate, which was lower than originally expected.

And Do-geol, head of the budget office of the Ministry of Finance, said, “We have already implemented restructuring when the supplementary budget was organized last year and this year’s budget was organized.” There is a side where you can see the room,” he explained.

Nam-ki Hong “Should be viewed in terms of non-key currency countries… I have no choice but to voice my concerns”

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Deputy Prime Minister Hong Nam-ki, who has continued a tug-of-war with the Party over the size of the extra budget, expressed concern over the rapidly increasing Narat debt.

Deputy Prime Minister Hong told Facebook on the 2nd, “It is still lower than the OECD national average when looking at the absolute level, but looking at the rate of debt growth, we are not in a situation where we can be relieved.” It took 7 to 9 years to reach the 40% level, but it will take only 2 to 3 years to reach the 40% level to the 50% level at the current pace due to this unprecedented response to the corona crisis.”

“For non-key currency countries such as Korea, it is important to manage external credit. Among OECD countries (as of 2019), the national debt ratio (average) of the key currency countries exceeds 100%, whereas the debt ratio of non-key currencies does not exceed 50%. It is also necessary to keep in mind that it is at the level. “In particular, it cannot be overlooked that fiscal expenditure may increase rapidly due to the trend of slowing growth in the mid- to long-term, responding to ultra-low birth rates, the advent of an ultra-aged society, and special circumstances prepared for unification. Point”. He added, “Even if I heard a vulgar sound in many ways, I could not help but convey the voice of the fiscal authorities.”

Sung Myung-jae, professor of economics at Hongik University, said, “The financial conditions are deteriorating due to the aging of low birthrates, and the burden has been added to the recurring disaster subsidies.” “As the Corona 19 situation continues, the 5th and 6th subsidies are expected to increase, and so on. “We should also discuss how to bear the cost of the company.”

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