1H Gov't Borrowing Rises Record-high Level of 68 Tril. Won

SEOUL, KOREA- The government borrowed a record amount of loans from the central bank during the first half, a lawmaker said. In a press release published on September 25, Representative Park Won-suk of the minority Justice Party said, "By the end of June this year, the cumulative amount of government borrowing from the Bank of Korea was 67.8 trillion won, with interest payments also at a record-high level of 19.7 billion won."

"This is more than half of 131.56 trillion won borrowed for five years under the prior government of Lee Myong-bak and almost double of the overall loans borrowed under the Roh Moo-hyun administration from 2003 to 2007," he added.

He further said that the rise in loans was largely due to uncertainties in tax collection outlook amid the sluggish economic recovery but still reflected the fact that the government's fiscal management was haphazard.

To this, the Ministry of Strategy and Finance responded in a statement that the rising loans came from the fall in tax revenue, but the haphazard fiscal management is far from the truth. The ministry said that the loans from the central bank were used to plug a temporary shortfall in tax revenue, saying that it would not be unfair to simply compare the borrowing of the incumbent government with others that faced different economic conditions.

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