S. Korea's fiscal deficit narrows to 5-year low through July on solid tax revenues

SEOUL, Sept. 11 (Xinhua) -- South Korea's fiscal deficit through July narrowed to a five-year low, driven by solid tax revenues, government data showed Friday.

People work at the dealing room of Hana Bank in Seoul, South Korea, March 4, 2026. (Photo: Xinhua)

The consolidated fiscal balance, or gross revenue minus gross expenditure, posted a deficit of 20.1 trillion won (14.9 billion U.S. dollars) in the January-July period, down from a deficit of 57.5 trillion won tallied in the same period of last year, according to the Ministry of Planning and Budget.

The managed fiscal balance, which excludes social security funds to offer a more precise picture of the fiscal health, recorded a deficit of 64.8 trillion won in the first seven months of 2026, marking the smallest cumulative deficit for the period since 2021.

Gross revenue, including tax and non-tax revenues, jumped 71.1 trillion won from a year earlier to 456.1 trillion won in the seven-month period.

Tax revenue served as the primary driver, surging 41.4 trillion won to 274.0 trillion won.

Income tax collections expanded by 12.2 trillion won, fueled by higher earned income tax from performance bonuses and increased capital gains tax from rebounding real estate transactions.

Corporate tax grew by 4.4 trillion won on improved corporate earnings, and value-added tax advanced by 8.1 trillion won due to growth in private consumption and imports.

Securities transaction tax mounted by 6.4 trillion won on the back of higher stock trading volume.

Gross expenditure through July reached 476.2 trillion won, up from 442.5 trillion won logged a year earlier.

As a result of cumulative fiscal spending, central government debt stood at 1,354.2 trillion won at the end of July, up 15.7 trillion won from a month earlier.