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Korea's fiscal deficit exceeds 100 trillion won

Published: 08 Apr. 2025, 17:04 Updated: 08 Apr. 2025, 21:14

Headquarters of the Ministry of Economy and Finance [MINISTRY OF ECONOMY AND FINANCE]

Korea’s fiscal deficit exceeded 100 trillion won ($67.8 billion) in 2023, driven by a sharp drop in tax revenue. The managed fiscal deficit also surpassed 4 percent of GDP, marking the worst ratio since 2022.

The government approved the 2024 Fiscal Year National Settlement Report on Tuesday. It showed total revenue at 594.5 trillion won and total spending at 638 trillion won — down 17.7 trillion won and 18.6 trillion won, respectively, from the previous year’s budget.

The consolidated fiscal deficit stood at 43.5 trillion won, or 1.7 percent of GDP.

Excluding surpluses from social security funds, the managed fiscal deficit reached 104.8 trillion won, exceeding the projected 91.6 trillion won.

This was the first time since 2022 that the managed deficit surpassed 100 trillion won. As a share of GDP, it reached 4.1 percent, above the 3.6 percent budget target.

The Ministry of Economy and Finance blamed the gap on falling corporate tax revenue. The managed fiscal balance is considered a key indicator of the government’s annual financial status.

“Lower revenue doesn’t lead to a deficit if spending is reduced,” said Park Bong-yong, director-general for fiscal management. “But we maintained public welfare spending, which widened the gap.”

Despite pledging to keep the deficit within 3 percent of GDP, the Yoon Suk Yeol administration has seen the figure worsen.

With ongoing global uncertainty, including U.S. trade tensions and political instability, concerns about continued revenue shortfalls remain high.

Calls for a supplementary budget are growing, which could further increase spending. If revenues fall and expenditures rise, this year’s deficit could surpass 2023 levels.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY JEONG JAE-HONG [[email protected]]