Input 2020.12.20 09:09 | Revision 2020.12.20 09:36
According to the economic outlook report of the Organization for Economic Cooperation and Development (OECD) on the 20th, the size of Korea’s General Government Budget Balance deficit this year was estimated to be 4.2% of gross domestic product (GDP). This is the fourth smallest of 42 major countries, including advanced countries and China and India, after Norway (1.3%), Denmark (3.9%) and Sweden (4.0%).
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Earlier, the International Monetary Fund (IMF) also published a Fiscal Monitor in October, where Korea’s General Government Primary Balance deficit this year was 3.7% of GDP, and Cyprus (3.1%) out of 34 developed countries. It is expected to be the second smallest after that. The IMF estimates that the average value of the budget deficit in developed countries will reach 13.1% of GDP as the fiscal deficit increases significantly, mainly in major developed countries such as Canada (19.8%), the United States (16.7%), the United Kingdom (15.5%), and Japan (13.9%).
This forecast of Korea’s fiscal balance is partially different from the size of this year’s managed fiscal deficit (118.600 billion won, 6.1% of GDP) that the Ministry of Strategy and Finance predicts. The ministry explained that the OECD·IMF adjusts the detailed items included in the fiscal balance for comparison between countries, so it is different from the standard values of the management fiscal balance or the integrated fiscal balance of the Ministry of Education.
As such, Korea’s fiscal deficit is relatively small compared to other countries because the scale of the world’s corona 19 damage is growing like a snowball, and countries are pouring enormous amounts of finances at the level comparable to that of the war.
Korea, which has relatively small damage compared to the United States and Europe, has a fiscal stimulus package (including tax cuts) corresponding to Corona 19 this year, which is 3.5% of GDP, following Finland (2.6%) and Spain (3.5%) out of 20 developed countries. It was the second smallest, the IMF estimated. In contrast, several advanced countries such as New Zealand (19.5%), Singapore (16.1%), Canada (12.5%), the United States (11.8%), and Japan (11.3%) have implemented fiscal stimulus measures of more than 10% of GDP in response to Corona 19. It turned out to be done.
In this regard, the OECD’s estimate of Korea’s national debt to GDP this year was 43.9%, the 8th lowest among 32 developed countries.
In the midst of rising fiscal deficits and national debts, international organizations such as the IMF are actively encouraging fiscal spending.
Although the spread of the Corona 19 vaccine is starting, it seems that it will take time for a complete recovery, so countries should support the economy through more fiscal spending.
The South Korean government also reported that the damage caused by the third spread has already exceeded the level of the second spread and the spread of new confirmed cases has not subsided. Became known.
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