SEOUL — South Korea's fiscal deficit has soared past 100 trillion won during the first half of 2024, driven by decreased corporate performances and increased government spending.
According to Yonhap News Agency, The finance ministry reported that the managed fiscal balance, a stringent measure of fiscal health, recorded a deficit of 103.4 trillion won from January to June, a significant increase from the 83 trillion won deficit observed during the same period last year. This deficit is the second largest on record, following the all-time high of 110.5 trillion won in 2020 during the peak of the COVID-19 pandemic impacts. Originally, the government had projected a deficit of 91 trillion won for this year. The increase in deficit is attributed to a 10 trillion won drop in tax revenue to 168.6 trillion won, primarily due to lower corporate tax collections linked to weaker corporate results. Additionally, total expenditures rose by 20.3 trillion won to 317.9 trillion won, with the government allocating more funds to various welfare programs. Meanwhile, the central government's debt stood at 1,145.9 trillion won at the end of June, reflecting a decrease of 900 billion won from the previous month.