Home > Business > Finance

National debt tops 1.3 quadrillion won, nearing 50% against GDP

Published: 06 Apr. 2026, 15:14

Korean won bills are pictured on Feb. 5. [YONHAP]

Korea's national debt exceeded 1.3 quadrillion won ($861.2 billion) last year, with the debt-to-GDP ratio nearing 50 percent, the Ministry of Finance and Economy announced Monday.

Sovereign debt, which covers bond sales and financial borrowing by central and provincial governments, amounted to 1.304 quadrillion won as of the end of 2025, up 129.4 trillion won from a year earlier, according to the report on the national settlement presented by the ministry.

Of the total, central government debt rose 127 trillion won to 1.268 quadrillion won, while local government debt stood at 36.4 trillion won.

The ministry announced the debt-to-GDP ratio stood at 49 percent, up from 46 percent a year earlier but below the record high of 50.4 percent set in 2023.

“There may be concerns about the absolute size of the national debt, but the economy faced simultaneous internal and external shocks last year, including weakened domestic demand due to the impact of the emergency martial law and rapidly changing global trade conditions," Hwang Soon-kywan, a senior ministry official, told reporters, adding that the government focused on active fiscal policy rather than a passive approach of cutting total spending.

The managed fiscal balance, a key gauge of fiscal health calculated on stricter terms, posted a deficit of 104.2 trillion won.

The shortfall narrowed slightly from 104.8 trillion won in 2024, coming in 7.5 trillion won lower than the 111.6 trillion won projected when the 2025 budget was drafted, according to the ministry.

Total national assets reached 3.584 quadrillion won in 2025, up 365.6 trillion won, or 11.4 percent, from a year earlier, it said.

The ministry attributed the increase in part to strong returns from the state pension fund.

The National Pension Service posted a record-high 18.8 percent return in 2025, boosting financial assets by 244.4 trillion won.

“Unlike previous years, fiscal operations in the 2025 fiscal year returned to normal, moving away from large-scale tax revenue shortfalls and worsening fiscal balances," Finance Minister Koo Yun-cheol said.

The settlement report, approved by the Cabinet on Monday, will be submitted to the National Assembly following a review by the state audit agency.

Yonhap