South Korea's central government debts hit an all-time high in August as it increased fiscal expenditure to boost the sluggish economy, a government report showed Tuesday.
Debts owed by the central government reached a record high of 511.1 trillion won (484.3 billion U.S. dollars) as of the end of August, the Finance Ministry said in its monthly assessment on fiscal conditions.
The fiscal debts grew 7.8 trillion won in August compared with the prior month after topping the 500 trillion-won level for the first time in July.
The ministry said the debts were exaggerated as there was no repayment in August of government bonds, which are repaid in March, June, September and December every year.
The ministry announced a fiscal stimulus package worth more than 40 trillion won in July when Finance Minister Choi Kyung-hwan took office. Choi said he will maintain an expansionary fiscal policy until ordinary people feel the effect of the stimulus.
The Bank of Korea (BOK) cut interest rates to a record low of 2 percent in October, just two months after lowering the rate to 2. 25 percent in August.
For the first eight months of this year, the combined national tax revenue was 136.6 trillion won, down 0.3 trillion won from the same period of last year on the back of the sluggish economic recovery.