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Korean economy maintaining recovery momentum amid pandemic: finance minister

All News 17:08 November 17, 2020

SEOUL, Nov. 17 (Yonhap) -- The South Korean economy is maintaining its recovery momentum amid the fallout of the new coronavirus outbreak, the country's chief economic policymaker said Tuesday.

During a conference call with global credit appraiser Standard & Poor's (S&P) earlier in the day, Hong discussed the country's overall economic situation and responses to the COVID-19 pandemic, according to the Ministry of Economy and Finance.

Every year, delegations from key global credit rating agencies visit South Korea for a meeting to evaluate the country's economic conditions and credit status. But this year, S&P held a conference call with the finance ministry and other institutions due to the virus outbreak.

The South Korean economy grew 1.9 percent on-quarter in the third quarter on improving exports, after two consecutive quarters of contraction.

This photo, provided by the Ministry of Economy and Finance on Nov. 17, 2020, shows Finance Minister Hong Nam-ki holding a conference call with global credit appraiser Standard & Poor's (S&P) for an annual meeting to assess the country's economic situation and credit status. (PHOTO NOT FOR SALE) (Yonhap)

Hong said that the country's debt-to-gross domestic product (GDP) ratio has risen due to aggressive fiscal spending in response to the pandemic, but a rise in the debt ratio is a global trend.

The country's debt is likely to reach a record 846.9 trillion won (US$765.4 billion) this year as the government sold deficit-covering bonds to finance four supplementary budgets, according to the finance ministry.

The nation's debt-to-GDP ratio will reach an all-time high of 43.9 percent this year, up 6.2 percentage points from the end of last year.

The top economic policymaker explained the country's proposed fiscal rules to S&P as efforts to bolster fiscal soundness. South Korea recently unveiled the proposal that will limit its debt to 60 percent of GDP and its fiscal deficit to 3 percent from 2025. The new rule is subject to parliamentary approval.


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