Ahn Dogeol: "Government Rolled Over 223 Trillion Won in Fiscal Funds Last Year"

Ando Geol, Member of the National Assembly.

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According to an analysis by Democratic Party lawmaker Ahn Dogeol (Gwangju Dongnam-eul) on June 2, based on data titled "Status of Bank of Korea Borrowings and Issuance of Fiscal Securities and Interest Payments" submitted by the Ministry of Economy and Finance and the Bank of Korea, the total amount of Bank of Korea borrowings and fiscal securities issued by the government last year due to a tax revenue shortfall reached 223 trillion won. This is the highest amount since relevant statistics have been compiled, representing a 37.5% increase compared to 2023 (162 trillion won), when a record-breaking tax revenue shortfall of 56.4 trillion won occurred.

Temporary borrowings and fiscal securities are funds the government borrows from the Bank of Korea or raises directly through issuance to cover mismatches between revenue and expenditure?essentially a form of "overdraft account." As the total amount borrowed or issued by the government last year reached an all-time high, the interest burden ballooned. The government paid 505.6 billion won in interest on Bank of Korea borrowings last year, a 19% increase from the previous year (425.3 billion won).

The National Treasury Fund Management Act stipulates that the government should prioritize raising funds through the issuance of fiscal securities over borrowing from the Bank of Korea. This is intended to mitigate inflation and fiscal monetization by encouraging the government to raise funds from the market rather than directly from the central bank. However, of the funds raised by the government last year, Bank of Korea borrowings amounted to 173 trillion won?3.5 times the amount raised through fiscal securities issuance (49.8 trillion won). As in 2023, the government continues to rely on expedient fiscal operations through central bank borrowings. In addition, with another tax revenue shortfall of around 30 trillion won last year, the growing interest burden from fiscal juggling is placing significant strain on the national finances.

Over the two and a half years since the inauguration of the Yoon Suk Yeol administration, total interest paid on Bank of Korea borrowings and fiscal securities issuance reached 954.1 billion won?2.8 times the total interest incurred during the five years of the Moon Jae In administration (343.2 billion won). Critics argue that the Yoon Suk Yeol administration's tax cuts for the wealthy and excessive fiscal juggling are undermining the nation’s fiscal capacity and exacerbating concerns about fiscal collapse.

Lawmaker Ahn stated, "Since the inauguration of the Yoon Suk Yeol administration, excessive fiscal juggling has led to a rapid increase in interest burdens. With tax cuts for the wealthy and large-scale tax revenue shortfalls for two consecutive years, the national coffers are empty, and the ballooning interest burden is shrinking the nation's fiscal capacity."

Ahn also emphasized, "The government must stop its disastrous fiscal management and fundamentally shift its fiscal policy toward active fiscal spending and securing a stable revenue base."

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