The national budget ran a deficit of 39.6 trillion won through the first quarter of this year. It was the smallest deficit in six years. Tax revenue such as income and corporate taxes increased on the back of a strong semiconductor cycle.
According to the Monthly fiscal trends March issue released by the Ministry of Planning and Budget on the 14th, the consolidated fiscal balance without social security fund posted a deficit of 39.6 trillion won in January–March. The deficit narrowed by 21.7 trillion won from a year earlier (a 61.3 trillion won deficit). The cumulative first-quarter deficit was the smallest since 2020 (55.3 trillion won).
The consolidated fiscal balance without social security fund shows the practical state of national finances. It is calculated by subtracting total expenditure from total revenue to get the consolidated fiscal balance, and then subtracting the size of the four major social security funds such as the National Pension and employment insurance.
With tax receipts coming in well, total revenue increased. Cumulative total revenue for January–March was 188.8 trillion won, up 28.9 trillion won from a year earlier. A Ministry of Planning and Budget official said, "Earned income tax rose sharply due to higher performance bonuses driven by strong results at semiconductor corporations such as Samsung Electronics and SK hynix, and corporate taxes also increased," adding, "With more real estate transactions, capital gains tax and others also expanded." The official also noted that fund revenue increased thanks to higher investment revenue at the National Pension.
Total expenditure was also relatively low during the same period. Cumulative total expenditure for January–March was 211.6 trillion won, up 1.7 trillion won. In particular, the execution rate of total expenditure was 29.1%, the lowest in eight years since 2018 (28.7%). On this, a Ministry of Planning and Budget official said, "Last year and the year before, there was an emphasis on encouraging front-loaded execution early in the year," adding, "We accepted criticism that early first-half execution leads to burdensome temporary borrowing, and decided not to do so this year."
Meanwhile, the balance of central government debt stood at 1,303.5 trillion won, down 9 trillion won from a year earlier.