Korea's fiscal deficit hits 84.2 trillion won from January to August

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Korea's fiscal deficit hits 84.2 trillion won from January to August

Published: 10 Oct. 2024, 18:09

Finance Minister Choi Sang-mok speaks during a national audit on Thursday at the government complex in Sejong. [YONHAP]

Korea's fiscal deficit grew markedly during the first eight months of 2024 amid weak corporate performances, the Finance Ministry said Thursday.

The managed fiscal balance, a key gauge of fiscal health calculated on stricter terms, posted a deficit of 84.2 trillion won ($62.43 billion) in the January-August period, larger than the shortfall of 65.8 trillion won a year earlier, according to the Finance Ministry.

This year's tally was the third-largest figure ever for any cited period. The shortfall hit an all-time high of 98.1 trillion won in 2020 due to the government's cash handouts for people affected by the Covid-19 pandemic.

Total revenue went up by 2.3 trillion won on year to 396.7 trillion won during the cited period this year, led by an increase in nontax income.

But tax revenue fell 9.4 trillion won to 232.2 trillion won due to the sharp decrease in the government's collection of corporate taxes on their weak performances.

Total expenditure went up by 21.3 trillion won on year to 447 trillion won as the government spent more on various welfare programs, according to the ministry.

The government's debt had reached 1,167.3 trillion won as of end-August, up 8 trillion won from a month earlier, the data showed.

In the meantime, Finance Minister Choi Sang-mok will announce measures to minimize the impact that the country’s growing fiscal deficit will have on regional governments this year.

During a national audit Thursday, Choi said that the ministry will come up with ways to address the central government’s decreased funding allocation for regional governments, a consequence of tax revenue shortfall.

“[The government] will make the best use of available resources as much as we can for the anticipated shortfall in tax revenue,” Choi said during the audit.

“We are discussing ways to minimize the impact on regional governments,” he said.

BY PARK EUN-JEE, YONHAP [park.eunjee@joongang.co.kr]