Ministry of Economy and Finance 'January Fiscal Trend'
Integrated Fiscal Deficit of 7.9 Trillion KRW from January to November Last Year
Managed Fiscal Deficit Also 45.6 Trillion KRW... Highest Since 2011
[Asia Economy Reporters Kwangho Lee and Hyunjung Kim] The fiscal balance, which reflects the state of the nation's treasury, is deteriorating. Due to the government's expansionary fiscal policy, the national debt has surpassed 700 trillion won, and the national fiscal deficit has reached an all-time high.
According to the 'Monthly Fiscal Trends January Issue' published by the Ministry of Economy and Finance on the 8th, total revenue from January to November last year was 435.4 trillion won, and total expenditure was 443.3 trillion won. The cumulative integrated fiscal balance, which is the total revenue minus total expenditure, recorded a deficit of 7.9 trillion won. This is the largest deficit since 2009 (-10.1 trillion won).
The cumulative management fiscal balance showed a deficit of 45.6 trillion won, breaking the record since the related statistics were first published in 2011. The management fiscal balance is the integrated fiscal balance (government total revenue minus total expenditure) excluding the four major social security funds, and it indicates the government's net fiscal situation.
Accordingly, it is analyzed that the government's forecast for last year's fiscal soundness indicators is practically out of reach. In the '2018-2022 National Fiscal Operation Plan' released in August 2018, the Ministry of Economy and Finance projected an integrated fiscal surplus of 10.8 trillion won and a management fiscal deficit of 33.4 trillion won for last year. In the '2019-2023 National Fiscal Operation Plan' released in August last year, the forecast was revised to an integrated fiscal surplus of 6.5 trillion won and a management fiscal deficit of 37.6 trillion won (1.9% of GDP). However, after releasing a supplementary budget, the forecast was again revised to an integrated fiscal surplus of 1 trillion won and a management fiscal deficit of 42.3 trillion won (2.2% of GDP).
A Ministry of Economy and Finance official explained, "The fiscal deficit is largest in the second quarter due to early and active fiscal spending in the first half, and the deficit gradually decreases after the third quarter as expenditure shrinks relative to revenue."
As of the end of November last year, the central government debt stood at 704.5 trillion won, an increase of 52.8 trillion won compared to the previous year. The official anticipated, "Since regular government bond repayments are scheduled for December, the debt size is expected to converge within the government's planned range or be slightly reduced."
He added, "Given the uncertainties in the domestic and international environment, the active role of fiscal policy is important, so we will devote all efforts to fiscal execution to support economic revitalization. We will continuously strive to establish a virtuous cycle of active fiscal policy → economic growth → increased tax revenue."
According to the National Debt Clock by the National Assembly Budget Office, as of 10 a.m. today, the national debt stands at 731.1362 trillion won. This is an increase of over 30 trillion won compared to 2018 (700.5 trillion won) in just one year. Compared to 2009 (360 trillion won), it has roughly doubled over the past decade. The national debt per capita at the same time is 14,101,191 won, which is also about twice the amount in 2009 (7.23 million won). This figure is calculated by the Budget Office based on the actual and projected debt of central and local governments on a per-unit-time basis. However, since the National Debt Clock is based on fiscal forecasts, the actual national debt size may differ.
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