Bangkok:The International Monetary Fund (IMF) has revised down its forecasts for South Korea's government debt-to-GDP ratio through 2031, attributing the change to robust economic growth and improved revenue prospects, the nation's budget ministry announced.
According to Yonhap News Agency, the IMF's latest Fiscal Monitor report predicts that South Korea's government gross debt-to-GDP ratio will be 46.1 percent this year. It is expected to stay between the mid-40 percent and low-50 percent range through 2031. The forecast for 2026 has been adjusted down by 8.3 percentage points compared to the April report, and the projection for 2031 is 51.3 percent, a decrease of 11.8 percentage points from the previous forecast in April.
The current year's projected ratio is approximately 37 percent of the Group of Seven's average of 123.6 percent and 43 percent of the average for 38 advanced economies, which stands at 107.6 percent.
The Ministry of Planning and Budget explained that the IMF's assessment underscores South Korea's strategic efforts to foster a positive cycle where expansionary fiscal policy boosts economic growth, subsequently leading to stronger tax revenue. The IMF emphasized the nation's strong GDP growth paired with the potential for enhanced revenue conditions through 2030.
Furthermore, South Korea plans to continue proactive investments to enhance growth potential and maintain fiscal sustainability, thereby reinforcing the synergy between fiscal policy and economic development.
Earlier in the week, the IMF increased its 2026 growth forecast for South Korea to 3.3 percent, an upward revision of 0.7 percentage points from its July estimate, attributed to strong semiconductor exports compensating for the impact of the Middle East conflict. The 2026 Annual Meetings of the IMF and the World Bank Group commenced in Bangkok on Monday and will continue until Sunday.