November 30, 2016 / 5:30 AM / a year ago

S.Korea official says 2016 debt-to-GDP will be smaller than expected

SEOUL, Nov 30 (Reuters) - South Korea’s finance ministry said on Wednesday the government’s books will be in better shape by the end of 2016 than it had forecast earlier as tax revenue has been improving throughout the year.

Speaking to reporters in Sejong, south of Seoul, Cho Kyoo-hong, deputy minister for fiscal affairs, said he sees the nation’s debt-to-gross domestic product at around 38.7 percent or 38.8 percent by the end of this year, smaller than the ministry’s earlier forecast of 40.1 percent for 2016.

Cho said the government was able to reduce overall debt as bonds that needed to be issued to fund the budget deficit were reduced.

While there has been a delay in the ministry’s projection to achieve a budget balance, Cho said debt-to-GDP won’t exceed 40 percent in 2017 as expenditures will be controlled.

Reporting by Cynthia Kim and Shin-hyung Lee

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