Government of South Korea revised up the level of government debt by KRW15.9tn (around 1.0% of GDP) mainly due to the inclusion of local governments' education bonds.



"The ratio of government debt is expected to rise from 38.5% in 2015 to 40.1% in 2016, exceeding the 40% level for the first time. A new five-year fiscal plan assumes that the government debt-to-GDP ratio will stabilise at around 41% in 2018. Meanwhile, net issuance in Korea Treasury Bond (KTB) is planned to decline from KRW52.3tn in 2015 to KRW46.2tn in 2016, which matches the narrowing of the fiscal deficit under management. Gross KTB issuance will also fall a bit from KRW111.9tn in 2015 to KRW110.4tn in 2016", estimates Societe Generale.