Park Hong-keun, the Minister of the Office for Government Policy Coordination, stated that the government projects deficit debt will increase to 1,300 trillion won by 2030, but he believes it can be managed effectively in the medium to long term. He emphasized the importance of assessing not only the scale and growth rate of the debt but also the country's ability to manage it through economic growth.
On September 9, during an appearance on SBS Radio's 'Kim Tae-hyun's Political Show,' Park said, "It is more important to consider whether we can manage the debt rather than just looking at its size or speed." He explained that when comparing with other countries and considering evaluations from international organizations, the situation is manageable.
The government estimates that deficit debt will rise from 1,117.1 trillion won in 2027 to 1,312.3 trillion won by 2030, an increase of approximately 195 trillion won over three years.
Park presented the ratio of general government debt (D2) to gross domestic product (GDP) as a basis for assessing the debt burden. He noted that South Korea's ratio stands at 54.4%, which is about half of the advanced countries' average of 108.2% as reported by the International Monetary Fund (IMF).
He mentioned that the debt ratio will change according to GDP growth, citing the projected nominal growth rate of 12.3% for this year. He highlighted the importance of expanding the economy, suggesting that there is potential for even higher growth rates.
Regarding the Future Response Fund, which is set to be established with an additional revenue of 162 trillion won, Park described it as a measure to balance future investments and fiscal soundness. He addressed concerns from opposition parties that it could be used for populist spending ahead of elections, emphasizing the need to secure investment resources.
Park explained that if all additional revenue were used to pay off debt, there would be insufficient resources for necessary future investments. He argued that investments over the next two to three years are essential to redesign the economic and social systems in response to the competitive landscape of artificial intelligence (AI) technology.
He also stated the need to move beyond the limitations of a one-year general account budget system that adjusts spending based on revenue fluctuations.
Regarding a legislative provision that allows the Future Response Fund to be used for projects designated by presidential decree, he explained that it serves as a flexible response mechanism for urgent fiscal needs. He added that in the event of new technologies emerging, plans could be submitted to the National Assembly for approval before implementation, even if not explicitly stated in the law.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.