Seoul
South Korea’s fiscal deficit expanded significantly in the first nine months of 2024, primarily due to higher government spending, the finance ministry reported on Thursday.
The managed fiscal balance, a key measure of fiscal health, showed a deficit of 91.5 trillion won ($65.1 billion) from January to September, marking an increase of 20.9 trillion won compared to the same period last year. This figure is the third-largest for the cited period, following a deficit of 108.4 trillion won in the first nine months of 2020.
The deficit is nearly in line with the government’s forecast of 91.6 trillion won for the year. The finance ministry indicated that, given ongoing revenue shortfalls, the deficit is likely to continue growing as the year progresses.
Government expenditure rose by 24.8 trillion won, totaling 492.3 trillion won, as the government increased spending on healthcare insurance and welfare programs. Revenue, however, saw a more modest rise, increasing by 3.1 trillion won to reach 439.4 trillion won during the same period.
In addition, South Korea’s money supply increased for the 16th consecutive month in September, with the M2 measure, which includes cash and demand deposits, rising 0.2% month-on-month. On a year-on-year basis, the money supply grew by 5.9%, slightly slower than the previous month’s 6.1% increase, reflecting ongoing monetary tightening.
