Deficit of 55.3 Trillion Won in Fiscal Management Balance from January to March... Largest Decrease Since Statistics Compilation

National Debt 731.6 Trillion KRW... Increased by 6.3 Trillion KRW from Previous Month
National Tax Revenue 69.5 Trillion KRW... Decreased by 8.5 Trillion KRW from Previous Year

[Asia Economy Reporter Kwangho Lee] Due to the impact of the novel coronavirus infection (COVID-19) and early budget execution, the deficit in the management fiscal balance, which shows the country's finances for the first quarter (January to March) of this year, expanded by more than 30 trillion won compared to last year. This is the largest deficit since the related statistics were first disclosed in February 2014. Concerns are rising that fiscal soundness will further deteriorate as the third supplementary budget bill (supplementary budget) is scheduled following the first and second rounds to stimulate the sluggish economy.

According to the 'Monthly Fiscal Trend May Issue' published by the Ministry of Economy and Finance on the 7th, total revenue from January to March this year was 119.5 trillion won, a decrease of 1.5 trillion won compared to the same period last year. During the same period, national tax revenue was 69.5 trillion won, down 8.5 trillion won.

This is due to a 1.3 trillion won decrease in value-added tax caused by the increase in local consumption tax rate (from 15% to 21%) and the deferral of some tax payments due to the extension of the COVID-19 related filing and payment deadlines.

Corporate tax decreased by 6 trillion won due to deteriorated corporate performance last year, including a downturn in the semiconductor industry. However, capital gains tax in March increased by 200 billion won compared to March last year due to increased real estate transactions.

The progress rate of national tax revenue was 23.9%, down 2.6 percentage points from 26.4% last year.

Total expenditure from January to March was 164.8 trillion won, an increase of 26.5 trillion won compared to the same period last year.

The integrated fiscal balance, which is total revenue minus total expenditure, recorded a deficit of 45.3 trillion won on a cumulative basis from January to March. As revenue decreased while spending increased, the deficit widened by 28 trillion won compared to the first quarter of last year.

The management fiscal balance, which excludes the four major social security funds from the integrated fiscal balance, recorded a deficit of 55.3 trillion won during the same period, an increase of 30.1 trillion won compared to the same period last year.

As of the end of March, the central government's national debt stood at 731.6 trillion won, an increase of 6.3 trillion won from February.

This is because the outstanding balance of treasury bonds and national housing bonds increased by 7.2 trillion won and 900 billion won, respectively.

Meanwhile, out of the 307.8 trillion won in major management target projects of central ministries and public institutions this year, 108.6 trillion won was executed by the first quarter. This is 35.3% of the annual plan.

An official from the Ministry of Economy and Finance explained, "The increase in the management fiscal balance deficit appears to be due to the emphasis on early budget execution at the beginning of the year and active fiscal management."

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