Government Borrows Record 92 Trillion Won from Bank of Korea in First Half of Year

 

 

 

During the first half of this year, the government borrowed nearly 92 trillion won from the Bank of Korea to cover its financial shortfall.

This amount is the largest since the Bank of Korea began compiling such statistics in 2011, with interest alone amounting to 129.1 billion won, also a record high.

According to the 'Government Temporary Loan and Interest Details' submitted by the Bank of Korea to Yang Bu-nam, a member of the National Assembly's Public Administration and Security Committee from the Democratic Party of Korea, the government borrowed a total of 91.6 trillion won in temporary loans from January to June this year.

Of this amount, 71.7 trillion won has been repaid, but 19.9 trillion won remains unpaid.

This increase in government borrowing indicates that the government is frequently using temporary measures to cover its financial shortfall due to insufficient revenue compared to expenditures.

In fact, Representative Yang explained, "The more the government utilizes temporary loans from the Bank of Korea, the more it means that expenditures exceed revenues, leading to frequent temporary financial adjustments."

The Bank of Korea's temporary loan system for the government is a means to address temporary funding shortages that arise during the fiscal year, similar to an individual opening a revolving credit line with a bank to secure necessary funds.

While such loans are used to cover temporary funding shortages, they can become a burden in the long term due to the interest incurred.

Representative Yang emphasized the need for financial measures, stating, "With the reduction in local grants and the potential easing or abolition of comprehensive real estate tax, the financial damage to local governments could become more severe."

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Government Borrows Record 92 Trillion Won from Bank of Korea in First Half of Year