January Fiscal Management Deficit of 1.7 Trillion Won for the First Time This Year: "Revenue Decreased but Expenditure Increased Significantly"

MoF Publishes 'Monthly Fiscal Trends' March 2020 Issue

Fiscal balance trend (cumulative basis).

[Sejong=Asia Economy Reporter Joo Sang-don] In January this year, the managed fiscal balance, which shows the government's actual financial status excluding future guaranteed funds, recorded a deficit for the first time since monthly aggregation began. This was the result of increased total expenditure despite a decrease in tax revenue.

According to the 'March Fiscal Trend' announced by the Ministry of Economy and Finance on the 10th, total revenue as of the end of January was 51.2 trillion won, down 100 billion won compared to the same month last year.

In particular, national tax revenue was 36.5 trillion won, a decrease of 600 billion won compared to the same month last year. This includes a decrease in value-added tax of about 1.5 trillion won due to the increase in local consumption tax rate (from 15% to 21%).

Customs duties also decreased by 200 billion won from a year ago to 700 billion won. This was influenced by a 3.1% decrease in import performance from 89.2 billion dollars between December 2018 and January 2019 to 86.4 billion dollars between December 2019 and January 2020.

On the other hand, value-added tax increased by 1 trillion won year-on-year to 18.5 trillion won due to a decrease in refund payments. Transportation, energy, and environmental taxes increased by 200 billion won to 1.3 trillion won compared to the same month last year, reflecting the base effect of the temporary reduction in fuel tax (from November 2018 to August 2019).

Non-tax revenue was 1.6 trillion won, down 100 billion won year-on-year, while fund revenue increased by 600 billion won to 13.2 trillion won.

Total expenditure in January increased by 6.5 trillion won year-on-year to 50.9 trillion won due to proactive early execution. Both the general account (4.7 trillion won), special accounts (700 billion won), and funds (1 trillion won) increased.

Accordingly, the integrated fiscal balance in January recorded a surplus of 300 billion won, while the managed fiscal balance (excluding a 2 trillion won surplus in social security funds) recorded a deficit of 1.7 trillion won.

An official from the Ministry of Economy and Finance said, "The surplus margin decreased year-on-year due to proactive fiscal management such as early execution," adding, "This is the first time since monthly aggregation began in 2011 that the managed fiscal balance recorded a deficit as of January."

The January performance of early execution management projects was 33.3 trillion won, which is 10.9% of the annual plan.

The Ministry of Economy and Finance plans to disclose the fiscal balance and national debt performance figures as of the end of December 2019 in early April when the national settlement is announced.

This content was produced with the assistance of AI translation services.