Korea's debt ratio not that low, given population aging: report

South Korea's national debt ratio remains lower than advanced nations' ratios, but it is not that low when its aging population and income level are taken into account, a report said Wednesday.

The National Assembly Budget Office said in the report that Seoul thus needs to step up efforts to bolster its fiscal soundness as its national debt has been rising at a much faster clip in the 2010s than countries in Southern Europe that suffered a debt crisis.

According to the report, South Korea's ratio of national debt to its gross domestic product stood at 44.8 percent in 2015, far lower than the average 115.5 percent for all members of the Organization for Economic Cooperation and Development.

Comparable figures were 230 percent for Japan, 120.8 percent for France, 112.8 percent for Britain, 113.6 percent for the United States and 78.7 percent for Germany.

However, South Korea's debt-GDP ratio was not that low compared with the ratios of advanced economies in light of its population aging and income level.

Seoul's debt ratio is estimated to reach 40.9 percent in 2018, when it becomes an "aged society," in which more than 14 percent of the population is 65 or older. The country became an "aging society" in 2000, when the ratio topped 7 percent. Comparable figures were 32.6 percent for France in 1979 and 36.8 percent for Germany in 1972.

South Korea's per-capita GDP stood at $27,000 last year.

Germany's national debt ratio came to 45.5 percent when its per-capita GDP reached the level, with comparable figures amounting to 53.4 percent for Britain, 64.6 percent for Japan, 66.6 percent for France and 71.2 percent for America.

The budget office also sounded an alarm over the growth pace of South Korea's national debt. Between 2010-15, the country's national debt expanded at an annual average of 11.5 percent, the fifth-highest among 35 OECD members.

The growth rate was higher than 9.2 percent for Portugal, 7.2 percent for Spain, 5.5 percent for Greece and 3.5 percent for Italy, the office said, calling for government efforts to curb it.

The report came a day after the finance ministry said it will manage the national debt-GDP ratio at 45 percent or lower starting next year, in line with a new state budget management act. The law, if it passes parliament, would require the government to comply with a debt-GDP ratio of 45 percent and a balance of the government budget-GDP ratio of 3 percent under any circumstances.  (Yonhap)