South Korea’s local public corporations see debt reach 75 trillion won as net losses rise 31%

Debt at South Korea’s local public corporations reached 75 trillion won last year, while their combined net loss expanded by 31% to 3.5 trillion won.

The figures came from the Interior and Safety Ministry’s review of the 2025 settlement accounts and management performance of local public corporations. The 421 entities recorded a 5.2 trillion won, or 7.5%, increase in debt from the previous year.

The group includes 254 businesses directly operated by local governments, such as water and sewage utilities; 78 local public corporations, including Seoul Housing and Communities Corp. and Seoul Metro; and 89 local public agencies, including Seoul Facilities Corp.

Debt has risen steadily from 52.3 trillion won in 2017 to 61.3 trillion won in 2022 and 75 trillion won last year. The ministry said increased borrowing by regional development corporations involved in new-town construction, along with higher long-term rental deposits, formed the main reasons for the increase.

The debt-to-equity ratio also climbed to 41.4% last year, up from 39.3% in 2024. It has increased each year from 33.8% in 2021, reaching 36.0% in 2022 and 37.8% in 2023.

“

Increased borrowing by development corporations in the Seoul metropolitan area due to new-town construction and higher long-term rental deposits were the main factors.