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Potential risks in the liabilities of public institutions and the policy response

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  • Potential risks in the liabilities of public institutions and the policy response
  • Park, Jin; Choi, Joonook; Kim, Jiyoung; Heo, Kyoungsun
  • Korea Institute of Public Finance


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Title Potential risks in the liabilities of public institutions and the policy response
Similar Titles
Material Type Reports
Author(English)

Park, Jin; Choi, Joonook; Kim, Jiyoung; Heo, Kyoungsun

Publisher

Seoul:Korea Institute of Public Finance

Date 2012-12
Series Title; No Research Paper / 12-09
Pages 74
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Economic Administration
Holding Korea Institute of Public Finance

Abstract

Korea shows relatively low government debt/GDP ratio of 38% as of 2011. However, it should be noted that such a low ratio does not include the debt by the 288 public corporations of which aggregated liability amounts to 36% of GDP. The top 7 in the high debtors' list take up 95% of the total, and they are: Land & Housing (LH), Electricity (KEPCO), Gas (KOGAS), Expressway (KEC), Water Resource (K-Water), Oil (KNOC), and Railway (KORAIL).

The ‘most risky' financial statement is found in KEPCO. Though the second in the volume, it shows negative operating profits 4 years in a row. The next ‘very risky' one is KORAIL which is enjoying transient positive profit. The biggest debtor LH taking up 41% of the total liabilities by public corporations, is surprisingly categorized to the ‘risky', not ‘very risky' because it shows interest coverage ratio of 610%, the highest among the top 7 debtors. KOGAS and KNOC are also in the league of the ‘risky' followed by K-Water and Expressway in the ‘potentially risky' group. (The rest omitted)