South Korean state debt will reach peak next year

South Korean state debt will reach peak next year

The Korean government expects outstanding national debt to increase to an all-time high of Won 244.2 trillion (around $212.3 billion) in 2005. This figure is equal to 29% of the estimated 2005 GDP (Gross Domestic Product). State debt will increase by 19.4% compared to this year's Won 204.5 trillion. The fiscal budget will reach Won 131.5 trillion next year with a rise of 9.5% compared to Won 120.1 trillion for this year. The government forecasts that fiscal deficit will increase to Won 8.2 trillion, indicating a rise of Won 1 trillion from this year's estimated shortfall of Won 7.2 trillion. These figures are based on the expectation that the economy will grow by 5% in 2005. A recovery in domestic demand will create a slowdown in exports next year, enabling South Korea to achieve an economic growth of 5%. The world's twelfth largest economy is largely dependent on exports to fuel growth, but high oil prices are reducing global demand for some of the country's key goods, while China, a major trading partner, has taken measures to cool its overheated economy. Under these circumstances, South Korea will focus on domestic demand.