South Korea: Soaring government debt puts rating agencies on alert

August 13, 2024_ International rating agencies, including Fitch, are expressing concern over rising public debt in South Korea, highlighting that the country's financial situation is worsening. Jeremy Zook, Fitch's Asia-Pacific director, said that the fiscal deficit has increased since the pandemic, and that financial strength is no longer considered a strength for the country's rating. Tensions between the government, which advocates maintaining healthy public finances, and the opposition, which proposes direct aid to citizens, are palpable. The government recently decided to veto a bill that provides subsidies for citizens, highlighting the risks to fiscal sustainability. The news was reported by 매일경제, highlighting the economic challenges that South Korea faces in a context of growing indebtedness.