July 31, 2009

IMF warns S. Korea on growing debt

The International Monetary Fund warned South Korea Friday its government debt had reached levels that worried other countries.

The IMF said government debt in South Korea would jump to 39.4 percent of gross domestic product by 2014, up nearly 10 percentage points from the pre-recession ratio of 29.6 percent, The Korea Times reported Friday.

The outlook for public debt is more worrying in many countries, the IMF said. In particular, debt ratios in the advanced Group of 20 countries are projected to widen by about 40 percentage points of gross domestic product by 2014.

Tax cuts, a large economic stimulus package and $16 billion in river restoration projects had contributed to the nation's debt, The Korea Times reported.

The government's debt was expected to reach $326 billion in 2010, the newspaper said.