South Korea fiscal deficit hits five-year low amid rising tax revenue

South Korea's fiscal deficit reached its lowest level in five years during the first seven months of this year, driven by a significant increase in tax revenue. According to data from the Ministry of Economy and Finance, total revenue from January to July reached 456.1 trillion won, an increase of 71.1 trillion won compared to the same period last year.

The rise in revenue was fueled by growth in several key areas: income tax increased by 12.2 trillion won, value-added tax by 8.1 trillion won, and corporate tax by 4.4 trillion won. Additionally, increased stock market activity led to higher securities transaction taxes and special taxes for rural development.

Despite the improved fiscal balance, national debt continues to rise. Central government debt stood at 1,354.2 trillion won as of late July, an increase of 86.1 trillion won since the end of last year. This growth is attributed to expanded government spending on welfare, economic responses, and industrial support, as well as scheduled treasury bond issuances. As of August, cumulative treasury bond issuance reached 162.3 trillion won, accounting for 72.6% of the annual limit.