Growing trade deficit, falling national tax revenue, fixing inflation on twin deficits

The trade deficit reached $5.3 billion in February, and the cumulative trade deficit between January and February reached $17.95 billion, 39% of last year's annual trade deficit of $47.785 billion, which was already the largest on record, came out in two months. With negative growth In the fourth quarter of last year, which turned around, GDP growth was -0.4%, falling 0.7%p behind the average of OECD (Organization for Economic Co-operation and Development) member countries (0.3%).
National tax revenue was 42.9 trillion won in January, down 15 percent from a year ago to 6.8 trillion won, the largest decrease ever in January.
The decline in national tax in January was led by value-added tax, down 3.7 trillion won from a year ago, corporate tax down 700 billion won, customs duty down 300 billion won, oil tax down 100 billion won, capital gains tax down 1.5 trillion won, stock transaction tax down 400 billion won, A KRW 100 billion decrease in special tax for rural areas and a KRW 300 billion decrease in inheritance and gift taxes were the only increase in liquor tax by KRW 100 billion.
The decrease in exports leading the trade deficit is a 7.5% decrease in February exports (50.1 billion dollars) from the 5th consecutive month of deficit compared to the same period of the previous year. ) I plummeted.
The decrease in exports was concentrated in China, and exports to China decreased by 22.7% compared to the previous year.
Samsung Electronics is showing an operating loss of 2 trillion won in February in its flagship memory business.
As the government is focusing on the monetary supply advantage policy of injecting 1.5 trillion won in the export support budget this year and increasing the supply of trade finance to 362.5 trillion won, inflation due to the supply advantage is expected to increase.
Wei Li, global chief investment strategist at BlackRock, the largest US asset management company advising the Ministry of Strategy and Finance of Korea, said, "The process of controlling inflation is revealing the limitations of the central bank's tightening policy." While inflation may subside somewhat as prices ease, it will remain above the Fed's inflation target for the next few years," he warned clients.
His letter, published by MarketWatch, said, "The Fed has raised the US interest rate from 0% to 4.50% to 4.75% for one year to control inflation, but the January price index raises the possibility of a rebound in inflation. "Some Fed members are suggesting the possibility of a 0.50%p big step at the Federal Open Market Committee (FOMC) in March, and it will not be easy to control inflation even with an aggressive rate hike," he said, evaluating 'inflation fixation'.

In the early 1980s, the hard-line conservative system of the twin deficit led to a financial crisis by overusing war with Thatcherism and Reaganomics’ supply-dominant economy, which formed a double wagon in the establishment of a free trade world single market system that strengthened rigidity and security by making unions enemies. In 2023, the Yoon Seok-yeol system is the only one in the US Democratic Party fair trade system without any cooperative countries to cooperate with the UK's hard-line conservative decline.