As of August this year, the national deficit has reached 43 trillion won. Thanks to improved corporate performance and increased stock market transactions, tax revenue has risen, leading to a 45.3 trillion won improvement in the fiscal balance compared to the same period last year. However, total expenditures have also increased by over 39 trillion won, and central government debt has surpassed 1,372 trillion won.
According to the "Monthly Fiscal Trends for October" report released by the Ministry of Economy and Finance on October 15, total revenue for the year up to August was 529.7 trillion won, an increase of 98 trillion won from the same period last year. The revenue progress rate stood at 75.6%.
The increase in total revenue was primarily driven by national tax revenue. By August, national tax collected reached 329.9 trillion won, up 69.1 trillion won from the previous year. The progress rate for this revenue was recorded at 79.4%.
By tax category, corporate tax increased by 28.2 trillion won to 91.6 trillion won due to improved corporate performance. Income tax also rose by 14.4 trillion won to 101.1 trillion won, driven by increased performance bonuses and higher real estate transaction volumes. Value-added tax reached 65.1 trillion won, an increase of 7.4 trillion won, influenced by rising import values and private consumption. Securities transaction tax increased to 9.2 trillion won due to higher trading volumes and the return of tax rates, while the rural development tax also rose by 9.5 trillion won, benefiting from increased KOSPI trading volumes.
Non-tax revenue increased to 32 trillion won, up 9.2 trillion won from the previous year, while fund revenue rose to 167.8 trillion won, an increase of 19.8 trillion won.
Expenditures also continued to rise. Total expenditures by August reached 524.7 trillion won, an increase of 39.3 trillion won from the same period last year. Budget expenditures amounted to 376 trillion won, up 31.2 trillion won, while fund expenditures reached 148.5 trillion won, an increase of 8 trillion won. The total expenditure progress rate was 69.7%.
As revenue increased at a greater rate than expenditures, the fiscal balance improved. The cumulative consolidated fiscal balance recorded a surplus of 5 trillion won by August. However, when excluding social security fund balances such as the National Pension Fund, the managed fiscal balance showed a deficit of 43 trillion won, a reduction of 45.3 trillion won compared to the same period last year.
Despite the improvement in the fiscal balance, national debt has increased. By the end of August, central government debt reached 1,372.1 trillion won, an increase of 17.9 trillion won from the previous month and up 104 trillion won compared to the end of last year. Among this, the balance of treasury bonds was 1,263.5 trillion won, an increase of 102.1 trillion won from the end of last year.
In the national bond market, interest rates continued to rise. By the end of September, the interest rate for three-year treasury bonds was 4.011%, and for ten-year bonds, it was 4.407%, both up from the previous month. The Ministry of Economy and Finance attributed the rise in major country interest rates to factors such as rising international oil prices due to military conflicts between the U.S. and Iran and the possibility of further interest rate hikes in the U.S. this year.
From January to September this year, the issuance of treasury bonds reached 179.7 trillion won, accounting for 80.4% of the annual issuance limit. The average procurement rate in September was 4.25%, an increase of 0.15 percentage points from the previous month, while the average bid rate fell to 243%, down from the previous month. The balance of treasury bonds held by foreign investors also decreased by 3.7 trillion won compared to the previous month.
* This article has been translated by AI.
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