The balance of government and government-backed bonds reached a record amount of 953.24 trillion won (US$888.8 billion) last year, although the pace of the debt increase slowed, data from the Korea Financial Investment Association (KOFIA) showed Tuesday.
The government bonds balance, or the total issuance minus redemptions, came to 615.22 trillion won as of end-2017, the first time that it exceeded 600 trillion won. It marked a 5.8 percent increase from the previous year.
The balance for government-backed special bonds, issued by state agencies, came to 338.02 trillion won.
The debt growth, however, slowed for the second consecutive year, according to KOFIA, from a 10.5 percent increase in 2015 to 6.7 percent in 2016 and to 5.8 percent last year. The figure for 2017 is the smallest since the 3.7 percent increase in 2008, when South Korea was hit by the global financial crisis.
Government-backed special bonds also fell, their balance increasing 0.4 percent last year compared with 8.7 percent in 2015 and 0.7 percent in 2016. The figure was as high as 40 percent in 2009.
Related data indicated the government has been issuing fewer bonds in recent years. While the issuance increased from 86 trillion won in 2010 to 163 trillion won in 2015, it fell to 138 trillion won in 2016 and to 124 trillion won in 2017.
Officials say improving the national economy and higher tax revenue are behind such trends. The tax revenue last year was 265.4 trillion won, up 22.8 trillion won from the year before and 14.3 trillion won more than expected.
Corporate restructuring helped bring down the balance for special bonds, according to the officials.
Some 91 trillion won in special bonds were issued in 2015, which plummeted to 60 trillion won in 2016. They rose slightly to 64 trillion won last year. The bonds redemption rate jumped to 97.7 percent last year from 70.5 percent in 2015, meaning the redemption was nearly equal to issuance.