The national budget deficit for the first quarter of this year has decreased to below 40 trillion won, marking the lowest level since the COVID-19 pandemic. This improvement is attributed to a significant increase in revenue, primarily from national taxes.
According to the "Monthly Fiscal Trends for May" report released by the Ministry of Economy and Finance on May 14, the management fiscal balance recorded a deficit of 39.6 trillion won as of the end of March. This figure represents an improvement of 21.7 trillion won compared to the same period last year and is the smallest deficit for March since 2020.
The management fiscal balance excludes the revenues from social security funds such as the National Pension, providing a clearer picture of the government's actual fiscal condition. During the same period, the consolidated fiscal balance showed a deficit of 22.8 trillion won, while social security funds reported a surplus of 16.8 trillion won.
A spokesperson from the Ministry of Economy and Finance noted, "In terms of cumulative figures for March, this is the ninth lowest level since we began tracking these statistics in 2012. Compared to the deficit of 55.3 trillion won during the COVID-19 period in 2020, we are seeing a normalization of fiscal conditions."
The improvement in fiscal balance is driven by increased revenue. Total revenue for the first quarter reached 188.8 trillion won, an increase of 28.9 trillion won from the previous year. National tax revenue rose by 15.5 trillion won, along with increases in non-tax revenue (5.8 trillion won) and fund revenue (7.5 trillion won).
The rise in national tax revenue is attributed to several factors, including an increase in income tax and capital gains tax, improved corporate performance leading to higher corporate taxes, a decrease in value-added tax refunds, and increased import volumes. Additionally, the expansion of stock market transactions contributed to higher securities transaction taxes, further boosting revenue.
The increase in fund revenue was significantly influenced by expanded investment returns from the National Pension. The recent positive performance in financial markets has been reflected in the growth of fund revenues.
Total expenditures amounted to 211.6 trillion won, an increase of 1.7 trillion won compared to the same period last year. The growth in revenue outpaced the increase in expenditures, leading to an overall improvement in the fiscal balance.
Central government debt saw a slight decrease. As of the end of March, central government debt stood at 1,303.5 trillion won, down by 9 trillion won from the previous month.
* This article has been translated by AI.
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