The Korea Herald


S. Korea's fiscal deficit hits record high through March

By Yonhap

Published : May 9, 2024 - 10:25

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The building of the finance ministry (Herald DB) The building of the finance ministry (Herald DB)

South Korea's fiscal deficit reached an all-time high in the first three months of 2024 due to rising expenditures aimed at buttressing an economic recovery, the finance ministry said Thursday.

The managed fiscal balance, a key gauge of fiscal health calculated on a stricter term, posted a deficit of 75.3 trillion won ($55.07 billion) in the January-March period, up from the previous year's 54 trillion won, the finance ministry said in its monthly public finance report.

This year's figure was the largest ever for any three-month tally since the ministry began compiling the data in 2014.

"The increasing deficit came as the government is administering a larger amount of fiscal spending in the first half," a ministry official said.

With a goal to boost domestic demand and extend support for vulnerable people, the government has vowed to administer more than 65 percent of the yearly fiscal spending, or a record level, during the first six months of this year.

The Cabinet last year approved the government's plan to front-load up to 75 percent of fiscal spending for 2024, or 412.5 trillion won, in the first half.

Tax revenue fell 2.2 trillion won on-year to 84.9 trillion won during the January-March period as the government's collection of corporate taxes fell 5.5 trillion won on weak corporate performances. Income tax revenue also decreased 700 billion won.

Taken together, the government's total revenue came to 147.5 trillion won, compared with 145.4 trillion won logged in the same period last year.

Total expenditures also rose by 25.4 trillion won to stand at 212.2 trillion won.

The central government's debt came to 1,115.5 trillion won as of end-March, down 4.9 trillion won from a month earlier, the report showed. (Yonhap)