South Korea’s fiscal deficit reached an all-time high in the first three months of 2024 due to rising expenditures. This was primarily attributed to increased expenditures aimed at strengthening the ongoing economic recovery.
The managed fiscal balance, a key gauge of fiscal health calculated on a stricter term, posted a deficit of 75.3 trillion won ($55.07 billion) in the January-March period, up from the previous year’s 54 trillion won, the finance ministry said in its monthly public finance report.
This year’s figure was the largest for any three-month tally since the ministry began compiling the data in 2014.
South Korea experienced its fastest economic growth in over two years during the first quarter of 2024. The growth was driven by a continued recovery in exports and an increase in construction investment, as reported lately by the central bank. Â
Preliminary data from the Bank of Korea (BOK) revealed that the country’s real gross domestic product (GDP) rose by a higher-than-expected rate of 1.3 percent on a quarterly basis in the January-March period. This expansion surpassed the market estimate of 0.6 percent and the 0.6 percent growth seen in the September-December period.
This figure represented the highest growth rate since the fourth quarter of 2021 when the economy expanded by 1.4 percent. On a year-on-year basis, South Korea’s economy grew by 3.4 percent in the first quarter, surpassing the 2.2 percent growth seen in the final quarter of 2023.
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