South Korea’s fiscal deficit stretched to a record high by November last year as the government kept up aggressive fiscal expansion despite reduced tax revenue from economic slowdown.
According to the finance ministry’s monthly fiscal report on Wednesday, Korea’s consolidated fiscal balance, or the difference between the government’s total income and spending, recorded a deficit of 7.9 trillion won ($6.8 billion) for the January-November period last year, the largest since 2009 when the country logged a deficit of 10.1 trillion won in the aftermath of the global financial crisis.
The operational fiscal balance, which excludes social security funds from the consolidated balance, also came at a loss of 45.6 trillion won, the biggest since the ministry started compiling the related data in 2011. The government earlier expected a smaller deficit of 42.3 trillion won.
Tax revenue reached 276.6 trillion won in the January-November period last year, off 3.3 trillion won from the same period in the previous year. Including December income, the government’s total tax income will likely miss its target for the first time since 2015, according to experts.
Tax collection reached 93.8 percent of annual target as of November, 1.5 percentage points slower than a year ago.
Total revenue, which includes non-tax and fund revenues, came at 435.4 trillion won, up 2.6 trillion won from a year-earlier period. Non-tax income fell 1 trillion won, while fund revenue rose 7 trillion won.
Cumulative expenditure totaled 443.3 trillion won, adding 47.9 trillion won on year.
National debt reached 704.5 trillion won as of the end of November, growing 6 trillion won to hit 700 trillion won for the first time since the data started being compiled in 1999.
By Yang Yeon-ho and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]