71 trillion won fiscal shortfall reported this year through May

Economy

Published: 14 Jul. 2022, 18:08

71 trillion won fiscal shortfall reported this year through May

A applicant signing up for government support on self-employed at a Small Enterprise And Market Service center in Seoul on Wednesday. Such support through the supplementary budget have resulted in increase in fiscavl deficits. [YONHAP]

The fiscal deficit was 71 trillion won ($54 billion) just five months into the year despite strong tax collections as spending increased due to the supplementary budgets.

Government debt broke the 1,000 trillion won mark in April.

According to the Finance Ministry on Thursday, the government collected 293.6 trillion won in revenue January through May, up 12.3 percent on year. Taxes were 67 percent of the total, up 21.5 percent.

Spending in the first five months of the year was 342.5 trillion won, up 21.5 percent, in part due to two supplementary budgets.

A 16.9-trillion won supplementary budget was approved in February followed by a 62-trillion won supplementary budget, a new record, at the end of May. The second supplementary budget for the year was the first for the Yoon Suk-yeol government.

The shortfall was 48.9 trillion won, compared to 20.5 trillion won in the first five months of 2021.

When including the net spending of four social security insurances — National Pension Service, Employment Insurance System, Korea Workers' Compensation Insurance and the National Health Insurance Services — the size of deficit was 71.2 trillion won, up 47 percent on year.

The debt owed by the central government increased to 1,018.8 trillion won in May from 17.8 trillion won in April, when the 1,000 trillion won mark was broken.

When including the debt owed by the local governments, the total is 1,068.8 trillion won.

In the first six months of the year, 104.5 trillion won of treasury bonds were issued. With interest rates increasing so too will coupon payments on future bonds sold.

"The interest rates on treasury bonds in June rose sharply as there have been concern over inflation becoming extensive and major countries speeding up tightening of monetary policies," said a Finance Ministry official. "While it slightly dropped on concern over the global economy, it is likely that the volatility in the market will continue for the time being."

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]