President Lee Jae-myung on Wednesday indirectly criticized calls from some quarters for fiscal austerity, citing a private research institute's analysis that the International Monetary Fund (IMF) assessed Korea's net debt ratio to gross domestic product (GDP) at around 10 percent. "To the strange people who endlessly sing the austerity tune," Lee said.
Lee shared the article on X (formerly Twitter) and wrote, quoting part of the article: "If funds raised through government bonds lead to investments that raise the economic growth rate and expand social productivity, potential growth, and the future tax base, the national debt ratio can actually stabilize."
The article reported that the Naramsallim Research Institute analyzed the IMF's "Fiscal Monitor" report the previous day and projected Korea's net debt ratio at 10.3 percent this year. This is significantly lower than the Group of 20 (G20) average of 89.6 percent and the overall average of 80.1 percent. Among major countries, Japan (134.3 percent) and Italy (129.0 percent) exceeded 100 percent, according to the report. In the article, Lee Sang-min, senior research fellow at the Naramsallim Research Institute, explained that "because Korea is not a reserve currency country, borrowing to purchase dollar assets has ultimately benefited the asset economy."
The article also noted that, amid concerns from some quarters about the absolute scale of Korea's debt and the rising debt ratio, the institute advised that the debt ratio should be lowered by expanding the size of GDP.
