By Kim Tae-jong



The nation's public debt has been growing faster than that of Portugal, Italy, Greece and Spain, the so-called "PIGS" economies of the Euro zone struggling under the weight of a massive sovereign-debt crisis.



According to the Ministry of Strategy and Finance, the public debt is currently estimated at 514.8 trillion won, based on the 2014 fiscal budget, up 50.1 trillion won from last year.



The ratio of the public debt to gross domestic product (GDP) is expected to reach 36.4 percent, which is relatively low, compared to the Organization for Economic Cooperation and Development's (OECD) average of 108.8 percent as of 2012.



The main source of concern is the rapid rate of increase of the public debt over the last decade.



It has been growing at an annual average of 12.3 percent for the period of 2000 to 2012. In comparison, those of Spain, Greece and Italy stood at 7.4 percent, 6.7 percent and 3.6 percent, respectively. Korea came in seventh in terms of the increasing rate of its debts among the 34 OECD nations.



Experts warn that this rapidly rising rate can weigh on the nation's fiscal health and economic growth.



"The fast growth rate can be a big burden for the nation, as it is higher than the economic growth rate," Yoo Byung-kyu, the secretary general of the National Economy Advisory Council, said. "This means the nation shows low efficiency in fiscal budget spending."



He admonished the government to scale back its expenditure on populist welfare policies in order to bolster its financial health.



Due to the growing concern over the nation's financial health, the 2014 fiscal budget is set at 355.8 trillion won, up 4 percent from last year but 1.9 trillion won down from what the government asked for when the National Assembly passed the 2014 budget proposal.



The nation's public debt witnessed a significant increase in the late 1990s, in the wake of the 1997-1998 Asian financial crisis which prompted the massive injection of public funds to boost the economy. The recent 2008 global financial crisis also contributed to raising the nation's public debt.



The Park Geun-hye administration is particularly having a hard time achieving a fiscal balance as its welfare costs continue to grow despite a shortfall in tax revenue thanks to the economic downturn.



Experts said the aging society and snowballing debts at state-owned firms are also pushing the public debt to unsustainable levels.



"It's important to have a balance between government revenue and spending," said Park Sung-wook, an economist at the Korea Institute of Finance. "If the government has to increase spending, it also needs to increase revenue, which will face resistance but require a consensus. In this regard, the government should come up with long-term measures to cope with the imbalance and slow down the fast increase rate of the government debt."



