National Fiscal Deficit at 39.6 Trillion Won Through March... "Lowest Since 2020 Due to Increased Tax Revenue"

Ministry of Planning and Budget Releases May Fiscal Trends Report
Total Revenue Reaches 188.8 Trillion Won... National Tax Income Including Income Tax on the Rise

The national fiscal deficit for January to March this year was tallied at 39.6 trillion won. Due to increased tax revenue, including income tax and other national taxes, the deficit was the smallest since 2020.

According to the "May Fiscal Trends" released by the Ministry of Planning and Budget on May 14, cumulative total revenue as of March this year was 188.8 trillion won, up by 28.9 trillion won from a year earlier. The execution rate against the budget reached 28%, which is 3.1 percentage points higher than last year. The main factor driving the increase in total revenue was national tax revenue, which rose by 15.5 trillion won over the same period. In particular, income tax collections increased by 4.7 trillion won, mainly due to higher performance bonuses, which boosted earned income tax, and increased housing transactions, which led to higher capital gains tax. Value-added tax grew by 4.5 trillion won, driven by reduced refunds and other factors. Thanks to the stock market boom and a higher tax rate, securities transaction tax revenue increased by 2 trillion won. Corporate tax revenue rose by 900 billion won due to improved corporate performance. As the flexible tax rate on fuel taxes was partially restored, transportation tax revenue also increased by 500 billion won.

In addition, non-tax revenue was 17.2 trillion won, up by 5.8 trillion won. With the rise in National Pension investment returns, fund revenue also increased by 7.5 trillion won to reach 62.8 trillion won.

Total expenditure reached 211.6 trillion won, an increase of 1.7 trillion won from the previous year. As a result, the consolidated fiscal balance, which subtracts total expenditure from total revenue, recorded a deficit of 22.8 trillion won. When excluding the surplus from social security funds such as the National Pension from the consolidated fiscal balance, the managed fiscal balance—which shows the government's actual finances—posted a deficit of 39.6 trillion won. This marks an improvement of 21.7 trillion won compared to a year earlier. The deficit for the cumulative January–March period was the smallest since 2020, and the ninth smallest since the managed fiscal balance began being calculated in 2012. The supplementary budget (extra budget) passed by the National Assembly last month has not yet been reflected. It is scheduled to be applied starting with the April fiscal balance, which will be announced next month.

As of the end of March, the central government’s outstanding debt stood at 1,303.5 trillion won, down by 9 trillion won from a month earlier. The amount of government bonds issued in April was tallied at 22.6 trillion won. The government bond interest rate in April rose compared to the previous month, due to inflation concerns stemming from the ongoing Middle East conflict and changes in monetary policy expectations following strong Q1 GDP performance. Government bond issuance for January to April this year totaled 84.1 trillion won, accounting for 37.6% of the annual issuance ceiling.

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