Forex News

South Korea says it wants to stop its debt-to-GDP ratio from going up.

(Reuters) – SEOULSouth Korea says it will cut government spending to slow the growth of its debt and keep the debt-to-GDP ratio at mid-50 percent by 2027. This comes after years of massive stimulus measures that have hurt the country’s finances.

As part of the new administration’s fiscal policy plan, which was released on Thursday, the country’s finance ministry said that the government will cut the ratio of fiscal deficit to GDP to a level from before the pandemic, which is 3 percent or less. The ratio is expected to be around 5% this year.

The plan says that, among other things, the government will bring COVID-19 spending back to normal, sell off assets that public enterprises don’t need, and manage its employment quota and salary plans more strictly.

South Korea’s debt-to-GDP ratio went from 36 percent in 2017 to 50 percent this year. This is because the country took different steps, like giving out cash, to help the economy recover from the pandemic.

The ministry said that it would make a new fiscal rule based on the plan by the beginning of September. The new rules will go into effect as soon as the lawmaking process is done.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button