South Korea’s fiscal deficit stretched to a record high by October this year as tax revenue failed to keep up with the government’s supersized spending plans amid stubbornly sluggish economy.
According to the finance ministry’s monthly fiscal report published on Tuesday, the country’s consolidated fiscal balance, or the difference between the government’s total income and spending, recorded a deficit of 11.4 trillion won ($9.6 billion) for the January-October period this year. The operational fiscal balance, which excludes social security funds from the consolidated balance, was 45.5 trillion won also in the red.
Both deficit numbers were the largest since the ministry started compiling the data in 2011.
Tax revenue reached 260.4 trillion won, 3 trillion won less than last year. With only two months in the year, the government’s total tax collection is expected to fall far short of 294.8 trillion won targeted in budgeting last year. It would be the first time since 2015 for annual tax revenue to underperform target.
Total revenue, which includes non-tax and fund revenues, came at 406.2 trillion won, up 2.9 trillion won from a year-ago period.
Cumulative expenditure totaled 417.6 trillion won from January to October, up 43 trillion won from the same period last year.
National debt reached 698.6 trillion won as of the end of October, growing 4.2 trillion won from the previous month.
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