2021 External Debt
External Debt Amounts to US $628.5 Billion,
Soundness Indicators Remaining Stable
Korea’s external debt amounted to US $628.5 billion as of the end of 2021, rising US $83.6 billion from a year ago.
- Short-term debt: US $166.2 billion, up US $6.9 billion year-on-year
- Long-term debt: US $462.2 billion, up US $76.7 billion year-on-year
External Debt, 2020
(US $billion)
|
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
(y-o-y)
|
|
Total debt
-Short-term
-Long-term
|
382.1
104.8
277.4
|
412.0
116.0
296.1
|
441.2
125.6
315.6
|
470.0
135.5
335.3
|
544.9
159.3
385.6
|
628.5
166.2
462.2
|
83.6
6.9
76.7
|
* Source: International Investment Position (IIP) at the end of 2021(preliminary, Bank of Korea, February 23, 2022)
Government borrowings (up US $22.9 billion) went up as foreign investment in government debt rose. Central bank borrowings (up US $19.7 billion) rose due mainly to IMF SDR allocation. Borrowings by banks (up $19.1 billion) and other sectors (up USD 21.9 billion) grew due to increased issuance of foreign currency bonds.
Quality of debt
Won-denominated bonds recorded the biggest foreign inflows (up KRW 64.5 trillion in 2021) as foreign investors maintain a positive view of the nation's economy. Korean institutions expanded the issuance of foreign currency bonds on the back of global low interest rates as well as the growing overseas demand for Korean products due to improved external credibility. The first IMF SDR allocation in 12 years (up US $11.4 billion) served as a singular factor.
The increase in short-term external debt (US $6.9 billion) was at the lowest level since 2016. This comes as private trade credit expanded due to economic recovery and improvement in trade conditions after the pandemic.
Soundness
The external debt soundness indicators remain stable. The ratio of short-term external debt to total external debt dropped 2.8 percentage points to 26.4 percent, the lowest since 2015, and the ratio of short-term external debt to foreign exchange reserves went down 0.1 percentage points to 35.9 percent, which is lower than the average rate between year 2010-2020 and other emerging countries.
Solvency
Net foreign assets in debt instruments (total external asset in debt instruments - total external debt) came to US $449.4 billion, down US $33.4 billion from the end of the previous year.
Short-term External Debt and External Assets in Debt Instruments
(%, %p, US $billion)
|
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
Change
(y-o-y)
|
|
Ratio of Short-term Debt to Total External Debt
|
27.4
|
28.1
|
28.5
|
28.8
|
29.2
|
26.4 |
-2.8¹
|
|
Ratio of Short-term Debt to Foreign Exchange Reserves
|
28.2
|
29.8
|
31.1
|
33.1
|
36.0
|
35.9 |
-0.1¹
|
|
External Assets in Debt Instruments
|
781.4
|
877.4
|
918.8
|
957.2
|
1,027.8
|
1,077.9 |
50.2
|
|
Net External Assets in Debt Instruments
|
399.3
|
465.4
|
477.7
|
486.4
|
482.8
|
449.4 |
-33.4
|
1. %p
The government will keep close tabs on external debt situations in an effort to manage external soundness as uncertainties in the global financial market continues due to rising tensions in Ukraine and the possible acceleration of the US tapering.
Please refer to the attached pdf
