Korea’s fiscal deficit hits three-year low: Budget ministry

Korea's fiscal balance improved from a year earlier over the January-to-June period, with the deficit narrowing to a three-year low amid stronger tax revenue, the budget ministry said Thursday.

The managed fiscal balance, a key gauge of fiscal health calculated under stricter criteria, posted a deficit of 84.4 trillion won ($59.5 billion) as of the end of June, according to the Ministry of Planning and Budget, marking an improvement of 9.9 trillion won from the same period in 2025.

"[The managed fiscal balance deficit over the period] marks the lowest level since 83 trillion won posted in 2023,” an official from the ministry said.

Tax revenue reached 223 trillion won over the January-to-June period, up 33 trillion won from a year earlier.

The amount of corporate tax collected rose 4.3 trillion won on the back of strong earnings by local businesses.

Income tax revenue also rose 10.4 trillion won, due to major bonuses handed out by local businesses along with a higher number of houses traded.

Securities transaction tax revenue rose 5.2 trillion won over the period as well on higher trade volume on the market.

Nontax revenue and fund revenue rose by 9 trillion won and 19.3 trillion won, respectively, from a year earlier.

Total government expenditures amounted to 425.8 trillion won in the January-to-June period, up 36.6 trillion won from the same period last year, due to increased spending on national health insurance and cash handouts related to high oil prices.

As of the end of June, the central government's outstanding debt stood at 1,338.5 trillion won, down 6.8 trillion won from a month earlier.

Yonhap