Government data showed Wednesday that South Korea’s external debt increased by $32.1 billion from a year earlier. According to the Bank of Korea (BOK) and the finance ministry, Korea’s external liabilities reached $664.5 billion by the end of 2022, up from $632.4 billion in the previous year. There was an increase of $2 billion in short-term debt maturing in a year, with long-term debt increasing by $30 billion over the period to reach $497.8 billion.
The ratio of short-term debt to foreign reserves moved up 3.8 percentage points on-year to reach 39.4% at end-2022. A higher ratio means weaker debt-serving capability. Short-term debt to total external liabilities fell 1 percentage point on the quarter to 25.1%. The figure was the lowest since 1998 when 23.3 percent was recorded. As a result, the country’s total external assets fell by $54.7 billion to $1.02 trillion on an annual basis.
As of the end of 2022, its net external assets were $361.2 billion, down $86.8 billion from a year earlier. “Considering the uncertainties in the global financial market, including the direction of the U.S. Federal Reserve’s rate hike, we plan to closely monitor the country’s external debts,” the finance ministry said.