The International Monetary Fund (IMF) has slashed its forecast for Korea's public debt-to-GDP ratio this year to 46.1%. Shown is an aerial snapshot of the financial area of Yeouido in Seoul's Yeongdeungpo-gu District. (Seoul Tourism Organization)

By Uyen Nguyen

The International Monetary Fund (IMF) has slashed its forecast for the country's government debt-to-GDP ratio this year from to 46.1%, a drop of 8.3 percentage points from the 54.4% estimate made in April.

The October edition of the fund's Fiscal Monitor released on Oct. 14 said Korea's figure will remain far below the average of member countries of the G7 group of the world's top economies (123.6%) and advanced economies (107.6%).

Korea's projection for 2031 was also greatly lowered from 63.1% to 51.3%. The ratio is expected to jump 5.2 points between this year and 2031, considerably below the projected average of seven for advanced economies.

The factors cited for the downward revision included high GDP growth and the potential for improved revenue conditions through 2030.

The Organisation for Economic Co-operation and Development and global credit ratings agencies Fitch and Moody's recently also gave favorable assessments of Korea's fiscal situation and management.

Seoul will keep supporting recovery of the economy's potential growth rate through proactive investment and ensure fiscal sustainability to promote a "virtuous cycle of fiscal soundness and growth."

uyen81@korea.kr