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S. Korea's fiscal deficit widens 22 tln won in H1

All News 10:00 August 18, 2022

SEOUL, Aug. 18 (Yonhap) -- South Korea's fiscal deficit increased 22.2 trillion won (US$16.9 billion) in the first six months of this year from a year ago as the government revved up spending to tackle the fallout of the pandemic, data showed Thursday.

The managed fiscal balance, a key gauge of fiscal health calculated on a stricter term, posted a deficit of 101.9 trillion won in the January-June period, larger than a shortfall of 79.7 trillion won a year earlier, according to the finance ministry.

The increased deficit was mainly attributable to increased spending designed to support pandemic-hit merchants and vulnerable people under the record 62 trillion-won extra budget created in May.

The finance ministry said it aims to manage a yearly fiscal deficit at around 110.8 trillion won for 2022. The central government debt had amounted to 1,007.5 trillion won as of end-June, down 11.2 trillion won from the previous month, as it repaid maturing debt.

The Yoon Suk-yeol government plans to implement a belt-tightening policy in a shift from years of expansionary fiscal policy adopted by the previous Moon Jae-in administration in a bid to improve fiscal health.

To this end, the country plans to lower the fiscal deficit to a size equivalent to less than 3 percent of gross domestic product (GDP) over the next five years from the 5.1 percent estimate for this year.

The government also set the goal of reducing the debt-to-GDP ratio to around "the midpoint" of the 50 percent range by 2027. The estimated debt ratio for 2022 stands at 49.7 percent.

This computerized image depicts the burden of South Korea's rising national debt. (Yonhap)

This computerized image depicts the burden of South Korea's rising national debt. (Yonhap)


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