Public Institutions' Debt Ratio Falls for Second Year, Driven by Energy Firm Performance

South Korea's public sector is demonstrating resilience, with a notable reduction in its overall debt ratio for the second year running. This positive trend, driven primarily by the turnaround in performance of major energy corporations such as Korea Electric Power Corporation (KEPCO) and Korea Gas Corporation (KOGAS), signals a healthier fiscal footing for these vital state-run entities.

While the absolute debt volume has increased, primarily due to infrastructure projects and financial support programs by entities like the Korea Land and Housing Corporation and the Korea Housing Finance Corporation, the crucial debt-to-asset ratio has seen a significant improvement. This indicates a more efficient management of assets relative to liabilities, a key indicator of financial stability.

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KEPCO and KOGAS, etc., have reduced debt as energy prices stabilized compared to 2024.

Beyond financial metrics, the public sector is also expanding its workforce and enhancing employee welfare. An increase in total employment, particularly in healthcare and infrastructure, alongside a substantial rise in parental leave uptake—especially among men—reflects a commitment to social progress and work-life balance. This focus on human capital is as important as fiscal prudence.

The improved financial health of energy giants like KEPCO and KOGAS is particularly noteworthy. Their efforts in cost restructuring and adapting to stabilized energy prices have been instrumental. This demonstrates a capacity for internal reform and adaptation within our public enterprises, crucial for navigating economic fluctuations and ensuring stable energy supply.

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KEPCO, in particular, has made significant internal efforts through expenditure restructuring due to the large increase in debt.