The national budget ran a deficit of 43 trillion won from January to August this year, the smallest shortfall in eight years. The fiscal balance improved as corporate tax surged on the back of a semiconductor boom.
According to the Monthly Fiscal Trends October issue released by the Ministry of Planning and Budget on the 11th, the consolidated fiscal balance without social security fund posted a 43 trillion won deficit from January to August. The shortfall narrowed by 45.3 trillion won from a year earlier (-88.3 trillion won). The cumulative deficit during this period was the smallest since January to August 2018 (-56.9 trillion won).
The consolidated fiscal balance without social security fund is an indicator that shows the real state of the national finances. It is calculated by subtracting the four major social security funds such as the National Pension and Employment Insurance from the consolidated fiscal balance, which itself is total revenue minus total expenditure.
Rising tax revenue largely drove the increase in total revenue. Total revenue for January to August this year was 529.7 trillion won, up 98 trillion won from the same period a year earlier. Of total revenue, national tax receipts came to 329.9 trillion won, up 69.1 trillion won year over year. That is 79.4% of what was planned in this year's supplementary budget, 9.7 percentage points higher than last year's settlement of account progress rate.
Income tax rose by 14.4 trillion won, corporate tax by 28.2 trillion won, value-added taxes by 7.4 trillion won, and the security transaction tax by 7 trillion won.
Over the same period, total expenditure was 524.7 trillion won, up 39.3 trillion won.
Government debt increased. As of the end of August, central government debt was 1,372.1 trillion won, up 17.9 trillion won from the previous month. Compared with the end of last year, it rose by 104 trillion won. The balance of Treasury bonds increased by 102 trillion won from the end of last year, driving the rise.
