[비즈한국] South Korea's national fiscal deficit reached nearly 105 trillion won last year, exceeding the 100 trillion won mark once again for the first time in two years since 2022. Consequently, national debt climbed to 1,175.2 trillion won. Although the government established a fiscal rule to keep the managed fiscal balance deficit within 3% of the Gross Domestic Product (GDP), it has failed to meet this target for five consecutive years. As national debt continues to swell, the national debt per capita has risen to 22.95 million won.
However, the debt burden placed on each individual is expected to grow even faster, as the shrinking population exacerbates the effect of the continuously rising total debt. It is estimated that the per capita debt will exceed 30 million won in 2028, three years from now, and surpass 40 million won five years after that, in 2033. Considering that it took 17 years for the per capita national debt to rise from 1.31 million won in 1997 to over 10 million won, the burden on future generations is increasing at a rapid pace.
According to the ‘2024 Fiscal Year National Settlement Report’ deliberated and approved at the State Council on April 8, the managed fiscal balance, which reflects the government's actual financial state, showed a deficit of 104.8 trillion won last year. This deficit was larger than the government’s initial projection (91.6 trillion won). This marks the second time in two years since 2022 (a 117 trillion won deficit), which was marked by massive tax revenue shortfalls, that the managed fiscal deficit has exceeded 100 trillion won.
The ratio of the managed fiscal deficit to GDP also rose to 4.1%, higher than the previous year (3.6%). As the fiscal deficit widened, national debt surged, with last year's per capita debt estimated at 22.95 million won, an increase of 1 million won from the previous year (21.95 million won). The per capita national debt is calculated by dividing the total national debt by Statistics Korea's estimated population for the end of 2024 (51.217 million). The issue is that this per capita burden is growing at an increasingly rapid rate.
When records began in 1997, South Korea's national debt was only 60.3 trillion won, and the per capita debt was a mere 1.31 million won. The per capita debt increased by 200,000 to 300,000 won annually, eventually crossing the 5 million won mark in 2005 when the total national debt grew to 247.9 trillion won. After showing small annual increases, the per capita debt jumped by 990,000 won in 2009—the year of the global financial crisis—reaching 7.29 million won compared to 6.3 million won in 2008. Since then, the growth rate of per capita debt stabilized to the 500,000–700,000 won range, and it was not until 2014 that it surpassed the 10 million won mark, reaching 10.51 million won.
After crossing the 10 million won threshold, the per capita national debt remained relatively stable until it began to surge in 2020, as the effects of the COVID-19 pandemic took full hold. At the time, the government compiled four supplementary budgets in a single year to overcome the pandemic, causing the total national debt to skyrocket by 123.4 trillion won in one year (from 723.2 trillion won in 2019 to 846.6 trillion won in 2020). Consequently, during the same period, the per capita debt jumped by 2.36 million won, from 13.97 million won to 16.33 million won.
As the government's supplementary budgets continued in 2021 and 2022, the national debt reached 970.7 trillion won in 2021 and surpassed the 1,000 trillion won mark in 2022, reaching 1,067.4 trillion won. Accordingly, per capita debt in 2021 increased by 2.42 million won compared to 2020 (16.33 million won), reaching 18.75 million won. In 2022, it rose by another 1.91 million won to 20.66 million won, marking the era of 20 million won in per capita debt.
According to the National Assembly Budget Office, as the national debt continues to rise, the debt burden that each citizen must bear will also increase. By 2028, the national debt will surpass 1,500 trillion won, reaching 1,565.2 trillion won, and the per capita debt, when divided by the population estimated by Statistics Korea, will exceed 30 million won at 30.42 million won. While it took eight years for the per capita debt to climb from the 10 million won range to the 20 million won range, the time it takes to move from the 20 million won range to the 30 million won range has accelerated to six years. Furthermore, it is estimated that by 2033, the national debt will reach the 2,000 trillion won era at 2,087.5 trillion won, and the per capita debt will also enter the 40 million won era at 40.9 million won.