Semiconductor Boom Reduces National Deficit to 32 Trillion Won, Lowest in 8 Years

Thanks to strong performance from semiconductor companies, South Korea's national deficit has decreased to 32 trillion won as of September this year. This marks the smallest deficit for the January to September period since 2018.

According to the Ministry of Economy and Finance's November issue of 'Monthly Fiscal Trends' released on November 12, the cumulative fiscal balance deficit for January to September has improved by 70.5 trillion won compared to the same period last year. This is the largest improvement since the publication of monthly fiscal trends began in 2014.

During the same period, total revenue reached 605.4 trillion won, an increase of 124.6 trillion won from the previous year. Total expenditures rose to 584.9 trillion won, up by 40.7 trillion won.

National tax revenue amounted to 385 trillion won, an increase of 95.4 trillion won compared to the same period last year. The increase in corporate tax accounted for 51.9 trillion won, representing more than half of the overall increase in national tax revenue. The ministry noted that improved performance among semiconductor companies led to a significant rise in corporate tax prepayments in both August and September.

Non-tax revenue and fund revenue also increased by 9.3 trillion won and 19.9 trillion won, respectively.

The consolidated fiscal balance, which is the difference between total revenue and total expenditure, showed a surplus of 20.4 trillion won. This is an improvement of 83.9 trillion won compared to the same period last year. Both the size of the surplus and the improvement are the highest recorded since the publication of monthly fiscal trends.

The fiscal balance is calculated by excluding the social security fund balance from the consolidated fiscal balance. As of September, the social security fund balance recorded a surplus of 52.4 trillion won. In September alone, the fiscal balance recorded a surplus of 11.1 trillion won, reducing the cumulative deficit from 43 trillion won at the end of August to 32 trillion won by the end of September.

As of the end of September, the central government's debt stood at 1,369.4 trillion won, a decrease of 2.7 trillion won from the previous month but an increase of 101.3 trillion won compared to the end of last year. A ministry official explained that the concentration of government bond repayments at the end of the quarter resulted in repayments exceeding issuance amounts in September.