The volume of fixed-income securities issued by the South Korean government reached an all-time high of 48.5 trillion won ($42.5 billion) in the first quarter, according to the Korean Financial Investment Association on Wednesday.

The figure was a 42.3 percent increase from the same quarter last year. It also surpassed the record set for the previous quarterly high -- 46.4 trillion for the second quarter of 2014.

Net debt issuance also posted a quarterly high with 34.07 trillion won. Net debt issuance refers to gross debt issuance minus repayments.

The government’s outstanding debt, as a result, rose to 674.5 trillion in the first quarter, exceeding the previous quarterly high of 660.3 trillion won for the second quarter of 2018.

The government is expected to rely on tax revenue to alleviate the fiscal burden, but with local firms’ lackluster first-quarter earnings reports along with declines in export volume and capital gains tax, industry watchers are expressing concerns.

Yet some analysts express a rosier outlook, saying the government’s aggressive budget spending of late is bound to result in an issuance of government securities -- that it’s a natural cycle.

The current administration is working to create another supersized budget of 504.6 trillion won, up 7.3 percent from this year’s record budget of 469.6 trillion won, for next year to finance its campaign to revitalize the economy.

“Concerning the ratio of GDP-to-fiscal integrity, Korea is one of the stable members among OECD countries,” said Huh Jung-in, an analyst at NH Futures.

“Considering the latest advice from the International Monetary Fund to support state finance by issuing more government bonds, the latest figure should not be considered ‘unprecedented,’” he added.

By Jung Min-kyung (mkjung@heraldcorp.com)