South Korea's Fiscal Deficit Reaches Alarming Levels

The managed fiscal balance, a key indicator of national financial health, has reported a staggering deficit of 94.3 trillion won by June this year, marking it as the fourth-largest deficit for the first half on record.

Revenue and Expenditure Overview

According to the "Monthly Fiscal Trends August Edition" released by the Ministry of Economy and Finance, the government’s total revenue as of the end of June was 320.6 trillion won, up by 24.7 trillion won from last year. Meanwhile, total expenditure rose to 389.2 trillion won, an increase of 17.3 trillion won.

Consolidated Fiscal Balance Insights

The consolidated fiscal balance, which subtracts total revenue from total expenditure, showed a deficit of 68.6 trillion won, an improvement of 7.4 trillion won from the previous year. However, the managed fiscal balance, excluding surpluses from social security funds, revealed a deeper deficit of 94.3 trillion won.

Future Fiscal Projections

With the second supplementary budget not reflected in the June figures, the deficit is expected to grow further in July. A ministry official noted the absence of major revenue schedules in June and the aggressive expenditure execution in the first half as factors contributing to the temporary expansion of the deficit.

Expenditure Progress and Treasury Bonds

The progress rate of total expenditure stood at 56.6%, with 7.7 trillion won executed due to the first supplementary budget. Additionally, the issuance of treasury bonds in July reached 21.2 trillion won, with foreign investors contributing a net inflow of 7.4 trillion won.