Ministry of Economy and Finance, July Fiscal Trends
Managed Fiscal Balance Deficit Reaches 81% of This Year's Target
National Debt Increases by 54 Trillion Won Compared to Last Year
As of May this year, the national budget deficit reached 74.4 trillion won, reaching 81% of the government's projected deficit of 91.6 trillion won for the year. The national debt increased by 54 trillion won compared to a year ago.
According to the 'Monthly Fiscal Trends July Issue' released by the Ministry of Economy and Finance on the 11th, as of the end of May this year, the government's total revenue recorded 258.2 trillion won, an increase of 1.6 trillion won compared to last year. National tax revenue, which accounts for about 60% of total revenue, was 151 trillion won, a decrease of 9.1 trillion won. Total expenditure increased by 23 trillion won from last year to 310.4 trillion won.
The Ministry of Economy and Finance explained, "Despite the decrease in national tax revenue, total revenue increased by 1.6 trillion won due to an increase in funds and non-tax revenue, and total expenditure increased by 23 trillion won due to factors such as increased welfare spending."
Accordingly, the integrated fiscal balance, which is total revenue minus total expenditure, showed a deficit of 52.2 trillion won. Excluding the four major social security funds such as the National Pension, the management fiscal balance, which shows the government's actual fiscal condition, recorded a deficit of 74.4 trillion won. As of the end of May, the size of the management fiscal balance deficit is the second largest since the monthly fiscal trends began in 2014, following 2020 (77.9 trillion won).
Compared to the deficit of 52.5 trillion won as of the end of May last year, the deficit has increased by 22 trillion won. Earlier, the government stated it would manage the management fiscal balance deficit at around 91.6 trillion won this year, but it has already reached 81% of that in just five months. Han Joo-hee, head of fiscal soundness at the Ministry of Economy and Finance, said, "The management fiscal balance can fluctuate at the end of each month depending on the fiscal situation, so it may decrease further from 81%."
The worsening national finances are leading to an increase in national debt. As of the end of May, the national debt stood at 1,146.8 trillion won, an increase of 54.3 trillion won compared to the end of last year.
Meanwhile, the issuance of government bonds from January to June this year was 100.1 trillion won, which is 63.2% of the annual total issuance limit. The procurement interest rate in June was 3.30%, down from 3.48% in the previous month, and the bid rate was 310%, down from 324% in the previous month.
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