National Debt Approaches 2,200 Trillion Won... 18.69 Million Won Debt Per Citizen

[Asia Economy Sejong=Reporter Kwon Haeyoung] Last year, the national debt approached 2,200 trillion won, surpassing 2,000 trillion won for the first time in history. The debt per capita that each citizen must repay increased by 23.4 million won to 18.69 million won within a year. This rapid increase in government spending is attributed to the expansion of welfare and support for COVID-19 damages, raising concerns that the pace of national debt growth is excessively steep and that strengthening fiscal soundness is urgent.

On the 5th, the government reviewed and approved the '2021 Fiscal Year National Settlement' containing these details at the Cabinet meeting.

Last year, the national debt stood at 2,196.4 trillion won, a sharp increase of 21.47 trillion won (10.8%) compared to the end of the previous year (1,981.7 trillion won). This is the first time since the preparation of the national settlement report began in the 2011 fiscal year that the national debt exceeded 2,000 trillion won, and for the second consecutive year, it surpassed the size of the Gross Domestic Product (GDP, 2,057 trillion won in 2021).

The national debt is the sum of confirmed debt, which is debt the government must repay by a set time, and unconfirmed debt, which includes amounts converted from pensions payable to public officials and military personnel. Last year, confirmed debt increased by 10.06 trillion won (14.0%) due to increased government bond issuance following two supplementary budgets for overcoming COVID-19, and unconfirmed debt rose by 11.41 trillion won (9.0%) due to a 9.35 trillion won increase in pension liabilities for public officials and military personnel, resulting in an overall increase in national debt.

Among these, the national government debt (D1), which the government is practically responsible for repaying, was recorded at 967.2 trillion won, an increase of 12.06 trillion won from the previous year. The ratio to GDP was 47.0%, marking the highest level since statistics have been available since 1997. This represents a 46.5% increase compared to 660.2 trillion won in 2017, the first year of the Moon Jae-in administration. This year, the debt is on the verge of surpassing 1,000 trillion won. Based on the first supplementary budget, the national government debt is 1,075.7 trillion won, reaching 50.1% of GDP.

Last year, the total national assets were recorded at 2,839.9 trillion won, an increase of 35.28 trillion won compared to the previous year. This increase was influenced by a 18.62 trillion won rise in liquid and investment assets due to increased returns on National Pension Fund operations, and a 9.22 trillion won increase in land value due to new land acquisitions and asset revaluation. Accordingly, net assets, calculated by subtracting liabilities from assets, increased by 13.81 trillion won (23.7%) to 643.5 trillion won, marking the highest growth rate since the introduction of financial settlement in 2011.