Historic Borrowing and Interest Payments

In an unprecedented move, the South Korean government borrowed a staggering 173 trillion won (approximately $117.21 billion) from the Bank of Korea (BOK) last year to address tax revenue shortfalls. The interest on these loans surpassed 200 billion won, setting a new record.

Year-by-Year Borrowing Trends

Data reveals a dramatic increase in government borrowing, from 36.51 trillion won in 2019 to a peak of 173 trillion won in 2024. This marks a significant jump from the previous high of 117.6 trillion won in 2023, highlighting a concerning trend in fiscal management.

Impact and Implications

The government managed to repay 172 trillion won, leaving a 1 trillion won balance. However, the interest payments, totaling 209.2 billion won, not only exceeded the 2023 record of 150.6 billion won but also underscored the financial strain caused by such borrowing. Lawmaker Lim Kwang-hyun emphasized the urgent need for fiscal policy adjustments to mitigate the inflation and interest burdens resulting from these short-term loans.