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The government debt-to-GDP ratio in Korea reached an all-time high of 45.4 percent as of the end of March, according to data from the Bank for International Settlements (BIS), Friday.

This is the highest level since the fourth quarter of 1990, when the BIS began compiling related data. However, both household debt and corporate debt relative to GDP have declined.

The government debt-to-GDP ratio first exceeded 40 percent at the end of the first quarter of 2020. It subsequently rose to 44 percent by the end of the fourth quarter of that year.

The household debt-to-GDP ratio stood at 92 percent as of the first quarter of this year, down from 93.6 percent at the end of the fourth quarter of 2023.

The corporate debt-to-GDP ratio stood at 112.2 percent, down from 113 percent.

The decrease in both household and corporate debt led to a drop in the private credit ratio, which measures the combined household and corporate debt relative to GDP. This ratio fell to 204.2 percent from 206.5 percent.

Korea's household debt-to-GDP ratio remains the fifth highest in the world, down from fourth place, due to the change in the base year from 2015 to 2020.

Korea's ranking was followed by Switzerland, Australia, Canada, and the Netherlands.

Korea's mandatory government spending has little room for adjustment, constrained by rapid population aging and climbing social welfare expenditures.

Last year, mandatory spending reached 53.3 percent, surpassing discretionary spending, which was at 46.7 percent.