South Korea's national debt this year is expected to expand 4.2 percent mainly because of overall increase in the issuance of government bonds, the nation's Ministry of Strategy and Finance said Wednesday.
According to the ministry, state liabilities will gain 12.7 trillion won (10.5 billion U.S. dollars) this year from a year ago to 311.6 trillion won (259 billion U.S. dollars).
The ministry said it expects the government debt for 2008 to account for 32.4 percent of the nation's gross domestic product, compared with 33.2 percent at the end of last year.
Although proportion of state liability seems quite healthy compared with the OECD average of 75.4 percent, the ministry said it plans to further reduce national debt ratio to 30 percent level by 2012.
The ministry said the government needs a solid financial management plan due to greater risk from the growing amount of national debt.
The ministry said it will distinguish between "debt without repayment source" and "debt with repayment source" for a better risk management.
The government is to reduce the proportion of the debt without repayment source from 13.4 percent out of GDP next to 12.1 percent by 2012, the ministry said.
The government also plans to increase the proportion of long-term government bonds to prolong the average maturity of government bonds from 7 years to 7.9 years this year, it said.
Source: Xinhua
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