S.Korean lawmakers scold gov’t for underestimated sovereign debts

October 16, 2013 Leave a comment

S.Korean lawmakers scold gov’t for underestimated sovereign debts

English.news.cn   2013-10-16 14:12:04

SEOUL, Oct. 16 (Xinhua) — South Korean lawmakers on Wednesday scolded the government for surging sovereign debts, which have been underestimated after excluding debts that are highly likely to be realized in the future or belonging to the government in the end. Combined debts, which the South Korean government should be accountable for, would reach 1,053 trillion won (1 trillion U.S. dollars) as of the end of 2013, main opposition Democratic Party lawmaker Lee Yong-sup said in a report for the parliamentary audit session on Wednesday.The figure, including debts from federal and local governments as well as those from state-run corporations, was expected to reach 79.3 percent of GDP this year. The state debts jumped 84.3 percent over the past six years.

Les said that actual sovereign debts should include those from public enterprises, which the government would be responsible for in case of insolvency, noting that public debts surged after the government left state-run firms with national construction projects, which require fiscal funds.

The country’s 2014 sovereign debts, which include debts from federal and local governments, would top the 500 trillion won mark for the first time in its history, according to the estimates by another Democratic Party lawmaker Chung Seong-ho.

Chung said that debts from state-run companies and quasi- governmental institutions would reach a new record high of 520.3 trillion won in 2013, adding that household debts has kept the record-breaking trend this year.

Warnings on the underestimated sovereign debts also came from a ruling party lawmaker. As of end-2012, debt liabilities of the South Korean government came to 902.1 trillion won, taking up 70.9 percent of the country’s GDP, according to Rep. Kim Tae-ho of the ruling Saenuri Party.

The figure, which involves debts likely to be realized and defined in the future such as pension payment for public servants, was much higher than 443.1 trillion won in sovereign debts, or 34. 8 percent of the GDP, that are used by the Finance Ministry to compare its state debts with those of other nations.

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