IMF Lowers Its Forecast for South Korea’s Government Debt-to-GDP Ratio This Year from 54.4% to 46.1% Following Higher-Than-Expected Tax Revenue

IMF Lowers Its Forecast for South Korea’s Government Debt-to-GDP Ratio This Year from 54.4% to 46.1% Following Higher-Than-Expected Tax Revenue

https://n.news.naver.com/article/023/0004003756

Summary:

  1. In its October issue of the *Fiscal Monitor*, released on the 14th, the International Monetary Fund (IMF) lowered its forecast for South Korea’s general government gross debt (D2) as a share of GDP from 54.4% to 46.1% in just six months.

  2. This is relatively low compared with the G7 average of 123.6% and the advanced-economy average of 107.6%.

  3. Major credit rating agencies have also expressed positive assessments of South Korea’s fiscal position.

  4. Fitch, an international credit rating agency, expects South Korea’s fiscal performance under next year’s budget to improve significantly compared with its previous projections.

    > The fiscal balance, excluding social security funds, is projected to improve from a deficit of 3.9% of GDP in 2026 to a deficit of 0.1% in 2027.

    > The consolidated fiscal balance is projected to post a surplus of 1.9% of GDP.

  5. In a report last month, Moody’s also offered a positive assessment of South Korea’s budget proposal for next year. It stated that “the key is whether investment in strategic industries translates into productivity gains and economic growth,” while noting that the budget “seeks to strike a balance between strengthening fiscal soundness and expanding future growth engines.”

submitted by /u/Blue_Yeosu
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