SEOUL: South Korea's public sector debt reached unprecedented levels in 2023, approaching 1,700 trillion won (approximately $1.19 trillion), driven primarily by increased debt among non-financial state-funded enterprises, as reported by the finance ministry on Thursday. The rise in debt marks a significant concern for the country's financial stability, as it constitutes the highest level recorded since the government began tracking such data in 2011.According to Yonhap News Agency, the total public sector debt, labeled as D3, amounted to 1,673.3 trillion won by the end of the last year, up from 1,588.7 trillion won recorded the previous year. This staggering figure equates to 69.7 percent of South Korea's gross domestic product (GDP) in 2023, surpassing the prior year's ratio of 68.4 percent. The finance ministry attributed this increase to a rise in central government bonds, which inflated the general government debt, known as D2, along with higher debt levels in non-financial state-funded firms.The D2 d ebt, encompassing central and provincial governments and nonprofit public institutions, also hit a new peak at 1,217.3 trillion won in 2023, rising from 1,157.2 trillion won the year before. The D2-to-GDP ratio increased to 50.7 percent, compared to 49.8 percent in 2022, highlighting the expanding fiscal challenge facing the nation.In light of these developments, the government has initiated a series of austerity measures targeting debt-burdened public energy companies to temper the escalating debt levels. These measures include raising electricity rates and gas prices earlier this year, with projections suggesting that D3 levels could continue their upward trajectory through 2028.
- September 13, 2026
