South Korea’s public account deficit narrowed in 2023 to 46.4 trillion won ($34.8 billion) from 58.7 trillion won a year earlier, Korean central bank data recently revealed.
South Korea’s public sector total spending fell 2 percent year-on-year to 1,153 trillion won, while its total income slipped 1 percent to 1,106 trillion won, the Bank of Korea (BOK) noted. The data also revealed that the increase in the collection of social insurance offset a fall in tax revenue.
South Korea’s public account logged a deficit for the fourth straight year due to economic uncertainties.
The central government’s total spending amounted to 493.2 trillion won ($370.1 billion) in 2023, higher than its total income of 428.3 trillion won ($321.4 billion).
Total expenditure by non-financial public corporations came in at 265.0 trillion won ($198.8 billion) last year, higher than their total income of 225 trillion won ($168.8 billion). Municipal governments saw their total income plunge from a 37-point-one-trillion won surplus to a 300-billion won deficit.
Notably, South Korea’s government launched a proposed budget of 677.4 trillion won ($509.71 billion) for the upcoming year, aiming to enhance welfare support for vulnerable populations and stimulate economic growth while maintaining fiscal responsibility. The 2025 budget reflects a 3.2 percent increase compared to the previous year. This follows a modest budget growth of 2.8 percent, the slowest in nearly two decades, as presented for 2024 by the Ministry of Economy and Finance.
The country’s projected managed fiscal balance for 2025 anticipates a deficit of 77.7 trillion won, an improvement from the expected shortfall of 91.6 trillion won this year.
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