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2021 External Debt

  • DivisionInternational Finance Bureau - International Finance Division
  • DateFebruary 23, 2022
  • Tel+82 44 215 4710

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

 

 

Ministry of Economy and Finance
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