S. Korea’s national debt stands at $822 bn in H1

South Korea’s national debt reached 1,083 trillion won ($822.62 billion) as of June, while the management fiscal balance widened to a deficit of 83 trillion won, data showed on Thursday.

According to data released by the Ministry of Economy and Finance, the nation’s central government debt totaled 1,083.4 trillion won in the first six months of the year, down 5.3 trillion won from the previous month. Compared to the end of last year, the national debt increased by 49.9 trillion won.

The government’s total revenue reached 296.2 trillion won, down 38.1 trillion won from the same period a year ago. National tax revenue came in at 178.5 trillion won, down 39.7 trillion won from the same period last year, primarily driven by decreases in income tax, corporate tax, and value-added tax.

Considering the base effects from tax support programs, the actual decrease in tax revenue is estimated to be around 29.5 trillion won.

Non-tax revenue reached 15.4 trillion won, down 3.2 trillion won from a year earlier. Fund revenue increased by 4.8 trillion won to 102.2 trillion won.

Total expenditures came to 351.7 trillion won over the cited period, down 57.7 trillion won on-year, as the end of the Covid-19 crisis response program and the compensation program for small business losses led to a significant decrease in total spending.

The consolidated fiscal balance, which subtracts total expenditures from total revenue, recorded a deficit of 55.4 trillion won as of the end of June. This indicates that the government spent significantly more than it collected from the public.

The management budget balance, a key gauge of fiscal health calculated by excluding the four major national funds such as pensions and employment insurance, was a deficit of 83 trillion won through June, already exceeding the government’s full-year deficit projection of 58.2 trillion won.

The deficit in the second quarter widened the most due to lower major tax revenues, but improved by 18.9 trillion won compared to last year, the ministry said.

In the January-July period, government bond issuance amounted to 116.3 trillion won, accounting for 69.3 percent of the total annual issuance limit of 167.8 trillion won.

Foreign capital inflow amounted to 4.6 trillion won in July, marking the fourth consecutive month of inflow. The foreign-held balance of government bonds stood at 210.9 trillion won as of the end of July.