S. Korean gov't reports $62 bn deficit in Jan-July despite tax revenue growth

[Graphics by Song Ji-yoon]

The South Korean government ran a deficit of 86.8 trillion won ($62.3 billion) for the first seven months this year even as tax revenue increased by nearly 40 trillion won.

The Ministry of Economy and Finance reported Thursday that the government’s total revenue came to 394 trillion won in January-July, adding 37.1 trillion won from a year ago. Tax revenue totaled at 261 trillion won, up 37.3 trillion won from a year ago, driven by corporate and income taxes that rose on recovery in business activities and hiring.

Total expenditure, however, grew sharply to total at 450.4 trillion won, up 72.8 trillion won versus a year ago as the government carried out relief programs to help small businesses recover from Covid-19 setbacks.

This resulted in a consolidated fiscal deficit of 56.3 trillion won. The balance of managed fiscal balance, which factors in the government expenditure on the country’s four main social security programs, came to a deficit of 86.8 trillion won.

Fiscal balance, however, improved compared to a month ago, said the government, as it vowed to manage the balance within the planned level until the end of this year.

The managed fiscal deficit is projected to reach 100.8 trillion won by the end of this year based on the secondary budget spending plan.

National debt stood at 1,022 trillion won at the end of July, up by 14.5 trillion won in a year. Compared with the end of 2021, the balance of government bonds increased 80 trillion won, housing bonds 2.2 trillion won, and foreign exchange stabilization bonds 800 million won.

Government bond issues in August totaled at 12.1 trillion won, down by 3.5 trillion won from the previous month.

Cumulative bond issues from January to August amounted to 132.2 trillion won, reaching 74.6 percent of annual limit.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]