[2022 National Audit] "Fiscal Soundness Deteriorated During Moon Administration... 2060 Per Capita National Debt 100 Million Won"

Budget Policy Office's Long-Term National Debt Forecast
5,624 Trillion Won by 2060, 7,137 Trillion Won by 2070
Generation 2030 Must Repay National Debt Over 5 Times Current Amount
Ruling Party Lawmakers Unite: "Hurry to Legislate Fiscal Rules"

Deputy Prime Minister for Economy Choo Kyung-ho is attending the National Assembly's audit on the Ministry of Economy and Finance (Economic and Fiscal Policy) held on the 4th, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Lee Hyun-joo] If the deteriorated fiscal soundness during the five years of the Moon Jae-in administration is not improved, the national debt burden per citizen is expected to exceed 100 million KRW around 2060.

According to the "Long-term National Debt Outlook from 2022 to 2070," estimated by the National Assembly Budget Office at the request of Kim Sang-hoon, a member of the National Assembly's Planning and Finance Committee from the People Power Party, if the fiscal policies and systems of the Moon Jae-in administration continue, the national debt will exceed 2,939 trillion KRW in 2040, surpassing 100% of the Gross Domestic Product (GDP), reaching 5,624 trillion KRW in 2060, and 7,137 trillion KRW in 2070, with an average annual growth rate of 4.0%.

The national debt per capita is also projected to increase at an average annual rate of 4.7%, reaching 35.99 million KRW in 2030, 58.56 million KRW in 2040, 89 million KRW in 2050, and exceeding 100 million KRW at 131.97 million KRW in 2060. Simply put, the current 2030 generation will have to repay more than five times the current debt.

In particular, the national debt burden on the working-age population (ages 15-64) will become even heavier. The national debt per working-age person is expected to exceed 100 million KRW by 2040, reach 272.25 million KRW in 2060, and 410.92 million KRW in 2070. This is because working citizens feel the burden more acutely through various taxes, pensions, and insurance premiums.

Assemblyman Kim Sang-hoon stated, "The fiscal soundness severely deteriorated due to the reckless governance during the five years of the Moon Jae-in administration," and emphasized, "The fiscal rules of the Yoon Seok-yeol administration must be legislated urgently."

Government: "Fiscal Rules Emphasize Historical Responsibility"

Earlier, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho stressed that fiscal rules must be legislated, calling it a "historical responsibility." Fiscal rules set standard criteria for aggregate fiscal indicators such as the government's fiscal balance, fiscal expenditure, and national debt. The government's proposal limits the deficit ratio of the management fiscal balance to GDP to no more than -3%, but if the national debt ratio exceeds 60%, the deficit margin is reduced to -2%, aiming to converge the national debt ratio within 60% in the mid to long term.

Park Dae-chul, chairman of the Planning and Finance Committee, also proposed an amendment to the National Finance Act to provide a legal basis for fiscal rules in line with the government's proposal. The core content is to manage the annual national budget deficit ratio within -3% of GDP.

Ryu Seong-geol: "We Will Experience a Lost Decade Inside the Crocodile's Mouth"

Ryu Seong-geol, the ruling party's secretary of the Planning and Finance Committee and member of the People Power Party, also emphasized the urgent need to introduce fiscal rules.

At the Ministry of Economy and Finance's audit held that day, Assemblyman Ryu pointed out, "The total expenditure growth rate of the previous government is more than twice that of the Park Geun-hye administration," and expressed concern, saying, "While expenditures are rapidly increasing, revenues are stagnating or decreasing, creating a so-called 'crocodile mouth graph.' Considering the entry into a super-aged society and the decline in the working-age population due to low birth rates, fiscal deterioration may worsen in the future."

Assemblyman Ryu also identified the exemption of 149 projects worth 120 trillion KRW from preliminary feasibility studies over the past five years and the welfare expenditure increase averaging 10.8% annually without securing funding as major causes of fiscal deterioration. He stated, "If fiscal rules are not introduced promptly to restore fiscal soundness, we will experience a lost decade inside the unclosing crocodile's mouth," and added, "We will learn from past mistakes and do our best to help the new government achieve livelihood recovery and economic stability as soon as possible."