Seoul: South Korea's fiscal balance showed improvement during the January-July period compared to the previous year, driven by strong growth in tax revenue resulting from increased incomes and a rise in home transactions, as reported by the budget ministry on Friday. The managed fiscal balance, an important measure of fiscal health calculated under stricter criteria, recorded a deficit of 64.8 trillion won (US$47.9 billion) by the end of July, reflecting an improvement of 22 trillion won from the same period in 2025. This marks the lowest deficit for the January-July timeframe since the 56.9 trillion won posted in 2021.
According to Yonhap News Agency, tax revenue amounted to 274 trillion won during the January-July period, an increase of 41.4 trillion won from the previous year. Corporate tax revenue experienced a growth of 4.4 trillion won, supported by strong earnings from domestic companies. Income tax revenue saw a rise of 12.2 trillion won, fueled by bonuses paid by domestic firms and an uptick in home transactions. Additionally, securities transaction tax revenue climbed by 6.4 trillion won during the period, amid a higher trading volume in the market.
Non-tax revenue and fund revenue also contributed to the improved fiscal balance, increasing by 9 trillion won and 20.7 trillion won, respectively, from the previous year. Meanwhile, total government expenditures reached 476.2 trillion won during the seven-month period, up 33.7 trillion won from a year earlier. As of the end of July, the central government's outstanding debt stood at 1,354.2 trillion won, reflecting an increase of 15.7 trillion won from the previous month.