The Largest Ever Increase in Integrated and Managed Fiscal Deficit Due to the Impact of COVID-19

Ministry of Economy and Finance, October Monthly Fiscal Trends

Integrated Fiscal Balance Deficit of 70.9 Trillion Won from January to August... Increased by 48.5 Trillion Won Compared to Last Year

[Sejong=Asia Economy Reporter Joo Sang-don] The impact of the novel coronavirus disease (COVID-19) has significantly increased the deficit in the integrated fiscal balance. Nearly 80 trillion won in deficit was recorded from the beginning of this year through August, which is about 48.5 trillion won more than last year, marking the largest increase ever. Additionally, corporate tax revenue decreased by nearly 900 billion won due to worsening corporate performance amid COVID-19.

According to the "October Monthly Fiscal Trend" released by the Ministry of Economy and Finance on the 12th, the integrated fiscal balance from January to August showed a deficit of 70.9 trillion won, expanding by 48.5 trillion won compared to the same period last year. The deficit had increased by 38.2 trillion won during the same period last year, setting a record high, which has now been surpassed this year.

The managed fiscal balance showed a similar trend. It recorded a deficit of 96 trillion won, worsening by 46.5 trillion won compared to the same period last year. This also represents the largest increase in deficit ever.

Total revenue from January to August was 317.8 trillion won, down by 8.8 trillion won compared to the same period last year. Among this, national tax revenue was 192.5 trillion won, a decrease of 17 trillion won.

Corporate tax collected by the end of August amounted to 41.8 trillion won, down by 14.6 trillion won compared to the same period last year. In particular, revenue in August was 11 trillion won, a decrease of 900 billion won. This decline in mid-term prepayments was due to worsening corporate performance in the first half of this year caused by COVID-19. Mid-term prepayment is required if the business period exceeds six months and the tax amount is over 300,000 won. At this time, the business operator can choose to pay either half of the previous year's corporate tax or the performance of the first half of the current year. The reduction in mid-term prepayments indicates that corporate performance in the first half of this year has deteriorated accordingly.

As of the end of August, central government debt reached 794.1 trillion won, increasing by 13.1 trillion won compared to the previous month due to the execution of the third supplementary budget.

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