This year, the national budget recorded a deficit of 61.3 trillion won from January to March. It marks the second-largest deficit in history, following last year.
According to the May edition of the 'Monthly Fiscal Trends' released by the Ministry of Economy and Finance on the 15th, the cumulative total revenue as of the end of March was 159.9 trillion won, an increase of 12.5 trillion won compared to March last year.
The increase in national tax revenue, which rose by 8.4 trillion won year-on-year, was mainly due to increases in corporate tax and income tax. The surplus of the Bank of Korea also led to an increase of 3.9 trillion won in other revenues during the same period.
As of the end of March, the cumulative total expenditure decreased by 2.2 trillion won compared to the same period last year, totaling 210 trillion won. The effects of changes in some dwellings fund project methods continued from last month.
The consolidated fiscal balance, which is the total revenue minus total expenditure, recorded a deficit of 50 trillion won. Excluding the surplus of social security funds such as the National Pension, which was 11.3 trillion won, the consolidated fiscal balance without social security fund shows a deficit of 61.3 trillion won. The total revenue increased and total expenditure decreased, resulting in an improvement of 14 trillion won compared to last year.
However, considering that last year's first quarter consolidated fiscal balance deficit (75.3 trillion won) was the largest since the monthly fiscal trends aggregation began in 2014, this improvement in the current deficit is interpreted as a base effect.
The supplementary budget of 13.8 trillion won, which was established earlier this month, is also expected to adversely affect the consolidated fiscal balance without social security fund. However, Huang Hee-jeong, head of financial health at the Ministry of Economy and Finance, noted that "the aggregates of the supplementary budget will not be directly reflected in the consolidated fiscal balance without social security fund in May," adding that it would depend on the timing of budget execution.
The deterioration of the national budget has led to an increase in debt. As of the end of March this year, government debt reached 1,175.9 trillion won, an increase of 34.7 trillion won compared to the year-end settlement.
From January to April, the issuance of government bonds amounted to 20.9 trillion won, accounting for 41.1% of the annual issuance limit. The procurement rate in April was 2.56%, down 0.09 percentage points from the previous month (2.65%). The bid rate was 274%. The Ministry of Economy and Finance explained that the decrease in interest rates compared to the previous month was influenced by the expanded preference for safe assets due to external uncertainties such as reciprocal tariffs with the United States and expectations of falling market interest rates.