S. Korea to pay 20 tln won in interest on state debt

SEOUL, July 13 (Yonhap) -- South Korea will have to pay nearly 20 trillion won
(US$15.6 billion) in interest on national borrowing in 2010 as the government is
seeking to expand spending to spur an economic revival, data showed Monday.

According to the data by the Ministry of Strategy and Finance, the government
needs to pay between 18.9 trillion won and 19.5 trillion won in interest on state
debt next year, up from 15.7 trillion won estimated for this year.
The increase is mainly due to expanded government borrowing and other stimulus
measures aimed at bolstering domestic demand and the economy, hit hard by a
global recession that started in the wake of financial turbulence last year.
The interest payment for next year would be twice as high as the 9.9 trillion won
paid for national debts in 2005.
The growing financial burden comes as the national debt, financed mostly by the
issuance of treasuries, has been rising sharply amid the government's
expansionary economic policy, the data showed.
State debts amounted to 366 trillion won this year, accounting for 35.6 percent
of gross domestic product, according to the data. The debts stood at 248 percent
in 2005 before rising to 282.8 trillion won, 298.9 trillion won and 308.3
trillion won in the following three years.
Experts worry the national debt will likely exceed 400 trillion won next year as
the government maintains its "expansionary" macroeconomic policy in a bid to
accelerate an economic recovery.
South Korea's economy is expected to shrink 1.5 percent this year, the finance
ministry forecast. It would mark the first minus growth in more than a decade as
exports and domestic demand were dented due to the global slowdown.
kokobj@yna.co.kr
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