The government borrowed the second-largest amount of temporary funds on record from the central bank last year through its overdraft facility. Data from the Bank of Korea revealed that the government’s temporary borrowings totaled 164.5 trillion won in 2025, with an additional 5 trillion won drawn in December. This amount was slightly lower than the record set in 2024.
In the first half of 2025, the government borrowed 88.6 trillion won amidst political turmoil following a martial law declaration in December 2024. The borrowing continued in the second half, with an additional 75.9 trillion won. Last year, the government paid 158.09 billion won in interest to the central bank, the second-highest annual interest payment on record.
The overdraft facility enables the government to cover short-term mismatches between revenue and spending by borrowing funds from the central bank. Meanwhile, the Ministry of Economy and Finance announced plans to swiftly execute portions of the 2025 defence budget that were not disbursed by the year-end. This decision follows controversy over the non-payment of around 1.3 trillion won in defence-related expenditures to military units and defence contractors.
