(Gettyimagesbank)

<이미지를 클릭하시면 크게 보실 수 있습니다>

South Korea’s total national debt surpassed 6,200 trillion won ($4.23 trillion) for the first time in history at the end of the third quarter in 2024, data showed on Thursday.

If the debt continues to increase at an average annual rate of 300 trillion won, it is projected to exceed 10 quadrillion won by 2037, 12 years from now.

According to the latest update on national debt statistics from the Bank for International Settlements (BIS) on Thursday, Korea’s total national debt - including household, corporate, and government debt - stood at 6,221 trillion won as of the end of 2024’s third quarter.

The BIS releases quarterly reports on sectoral and total debt figures for international comparisons.

Korea’s total national debt first exceeded 5,000 trillion won at the end of March 2021 and surpassed 6,000 trillion won by the end of 2023, a period that is under three years.

The average annual growth rate of national debt over the past five years also significantly outpaced the growth rate of nominal gross domestic product (GDP). While nominal GDP grew by an average of 4.6 percent per year in the five-year period from 2019 to 2024, total national debt increased by 6.7 percent annually.

The pace of debt growth was particularly high in the government and corporate sectors. Government and corporate debt grew at an average annual rate of 7.8 percent over the past five years while household debt increased by 5 percent per year during the same period.

Corporate debt surged by 1,000 trillion won over six years to total 2,797 trillion won by the end of last year’s third quarter. This increase in corporate debt was concentrated in the real estate and high-tech industries.

Concerns are arising that the prolonged construction downturn could become a major trigger for corporate debt risks. According to the National Assembly Budget Office, the number of marginal companies with an interest coverage ratio below 1 - meaning they pay more in interest than they earn -increased by 47 percent over eight years from 2,688 in 2015 to 3,950 in 2023. Korea’s GDP grew by 38 percent over the same period.