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Until recently, Korea was characterized by better fiscal soundness than other OECD countries, but it recorded a large deficit this year. If COVID-19 is prolonged, the national debt-to-GDP ratio will skyrocket. According to the KERI (2020), the fiscal deficit/GDP ratio exceeds −3 percent and the national debt/GDP ratio exceeds 40 percent. The national debt ratio will increase to 38.1 percent by the end of 2020 (36.6 percent by the end of 2019), and is expected to reach 39.1 percent in 2021 if the government maintains the current trend of spending (Table 4).

Table 4.

Trend and prospects for Korea's national debt

2018201920202021202220232024202520262027203020402050
National debt (trillion won) 680.7 723.8 788.2 843.5 897.1 962.8 1,029 1,097 1,165 1,233 1,240 1,930 2,863 
Share of GDP (%) 36.0 36.6 38.1 39.1 39.9 41.0 42.0 43.0 43.8 44.6 48.3 63.2 82.9 
2018201920202021202220232024202520262027203020402050
National debt (trillion won) 680.7 723.8 788.2 843.5 897.1 962.8 1,029 1,097 1,165 1,233 1,240 1,930 2,863 
Share of GDP (%) 36.0 36.6 38.1 39.1 39.9 41.0 42.0 43.0 43.8 44.6 48.3 63.2 82.9 

Source:NABO (2018).

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