South Korea's Fiscal Update: A Closer Look at the Numbers

As of May this year, South Korea's national budget deficit has been recorded at 54.2 trillion won. This figure, while significant, shows an improvement compared to the previous year, attributed to the base effect of a larger deficit in the past.

Revenue and Expenditure: Breaking Down the Figures

Total revenue saw a year-on-year increase of 21.6 trillion won, reaching 279.8 trillion won by the end of May. Tax revenue contributed significantly to this rise, with corporate tax and income tax showing notable increases. However, value-added tax experienced a slight decrease.

On the expenditure side, total spending increased by 4.9 trillion won from the previous year, totaling 315.3 trillion won. This includes the first month's expenditure from the first supplementary budget.

Understanding the Fiscal Balance

The consolidated fiscal balance, which deducts total expenditure from total revenue, revealed a deficit of 35.5 trillion won. The managed fiscal balance, offering a clearer picture of the government's fiscal status by excluding major social security funds, recorded a deficit of 54.2 trillion won. This marks an improvement of 20.2 trillion won from the previous year.

Looking Ahead

The second supplementary budget, passed this month, is anticipated to influence future fiscal reports. Officials from the Ministry of Economy and Finance have provided insights into the current fiscal trends, emphasizing the impact of last year's deficit on this year's improved figures.