S. Korea's debt interest payments likely to top 30tr won in 2025: data
The government's interest expenses of Treasury bonds, foreign exchange stabilization fund bonds and the national housing bonds reached 28.2 trillion won last year, up from 24.6 trillion won in 2023, according to data from the National Assembly Budget Office and the public website Open Fiscal Data.
The total has been rising by an average of 13 percent annually over the past four years, from 18.6 trillion won in 2020 to 19.2 trillion won in 2021 and 21 trillion won in 2022.
If this growth trend continues, interest expenses are projected to exceed 30 trillion won in 2025.
For this year, the government earmarked about 30 trillion won for Treasury bond repayment and 660 billion won for foreign exchange stabilization fund bonds.
Consequently, the ratio of national debt interest payments to total government expenditures climbed to 4.4 percent last year, up from 4 percent in 2023 and 3.1 percent in 2022.
A looming concern is the maturity of large amounts of government bonds issued during the COVID-19 pandemic.
As of end-2024, bonds worth 94 trillion won are set to mature this year and 98 trillion won next year. The figure will gradually decline to around 74 trillion won in 2027 and the 50 trillion-won range in 2028.
The government's two extra supplementary budgets this year are also expected to add to the burden.
In effect, about 100 trillion won worth of refinancing issuance is expected to flood the bond market this year and next. This could weigh on bond prices, drive up interest rates and further increase the government's debt-servicing costs. (Yonhap)
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Korea Herald
9 hours ago
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S. Korea's debt interest payments likely to top 30tr won in 2025: data
The South Korean government is expected to pay more than 30 trillion won ($21.6 billion) in interest on Treasury bonds and other national debts by the end of this year amid expansionary efforts to boost the economy, government data showed Sunday. The government's interest expenses of Treasury bonds, foreign exchange stabilization fund bonds and the national housing bonds reached 28.2 trillion won last year, up from 24.6 trillion won in 2023, according to data from the National Assembly Budget Office and the public website Open Fiscal Data. The total has been rising by an average of 13 percent annually over the past four years, from 18.6 trillion won in 2020 to 19.2 trillion won in 2021 and 21 trillion won in 2022. If this growth trend continues, interest expenses are projected to exceed 30 trillion won in 2025. For this year, the government earmarked about 30 trillion won for Treasury bond repayment and 660 billion won for foreign exchange stabilization fund bonds. Consequently, the ratio of national debt interest payments to total government expenditures climbed to 4.4 percent last year, up from 4 percent in 2023 and 3.1 percent in 2022. A looming concern is the maturity of large amounts of government bonds issued during the COVID-19 pandemic. As of end-2024, bonds worth 94 trillion won are set to mature this year and 98 trillion won next year. The figure will gradually decline to around 74 trillion won in 2027 and the 50 trillion-won range in 2028. The government's two extra supplementary budgets this year are also expected to add to the burden. In effect, about 100 trillion won worth of refinancing issuance is expected to flood the bond market this year and next. This could weigh on bond prices, drive up interest rates and further increase the government's debt-servicing costs. (Yonhap)
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