The Ministry of Economy and Finance announced on Jan. 8 that South Korea’s overall fiscal deficit was 7.9 trillion won in the period of January to November 2019. The deficit is the largest since 2009, when it amounted to 10.1 trillion won.
South Korea’s overall fiscal balance fell below zero in February last year and the deficit hit an all-time high since monthly records began in 1999 in each month from March to September. In the period of January to October 2019, the deficit was somewhat smaller than that for the same period of 2009, 13.3 trillion won to be specific.
From January to November last year, the operational fiscal balance, which excludes four major social security funds, posted 45.6 trillion won in deficit, the largest since monthly records began in 2011. This fiscal balance, calculated by subtracting fiscal expenditures and the funds from the total fiscal income, indicates the South Korean government’s actual fiscal conditions. Last year, the government estimated the deficit at 42.3 trillion won, taking aggressive fiscal policies into consideration. However, the actual deficit topped the estimate by a margin of more than three trillion won.
Under the circumstances, the sovereign debt of South Korea as of the end of November 2019 added up to 704.5 trillion won with a month-on-month increase of six trillion won. That month, the debt topped 700 trillion won for the first time with fiscal expenditures rising unlike the fiscal income.