Fiscal deficit of 54 trillion won in the first quarter, current account deficit of $4.4 billion, entering into twin deficit system
National tax revenue decreased by 24 trillion won in the first quarter compared to the same period last year, and the managed budget deficit was 54 trillion won, and 93% of the annual budget deficit was exhausted in the first quarter.
The government's national tax revenue plunged 24 trillion won from a year ago to 87.1 trillion won in the first quarter, which is the 'largest ever' scale, which is a 7.1 trillion won decrease from a year ago from income tax collection of 28.2 trillion won, a sharp decline of 1/4. led
In the first quarter of this year, the current account deficit of $ 4.4 billion and the fiscal deficit of 54 trillion won, and twin deficits began in the first year of the Yoon Seok-yeol administration. The tax revenue progress rate of 100 billion won came out at 21.7%, which was 4.7%p lower than the 5-year average (26.4%).
The decrease in national tax and non-tax revenue was KRW 145.4 trillion, a decrease of KRW 25 trillion from the same period last year in total revenue (national tax + non-tax + fund revenue).
Non-tax revenue was 7.4 trillion won, down 3.6 trillion won from the previous year, but fund revenue increased by 2.6 trillion won from the previous year to 50.9 trillion won due to an increase in insurance premium income (2.7 trillion won).
The government's tax collection rate of 21.7 percent in the first quarter of this year's 400.5 trillion won is the lowest figure since 2000.
As for the “fiscal trend,” the decrease in total revenue was greater than the decrease in total expenditure, resulting in a 41.4 trillion won deficit in the consolidated fiscal balance, and the deficit widened by 8.3 trillion won from a year ago.
The managed fiscal deficit is a 54 trillion won deficit, excluding 12.6 trillion won from social security funds such as the national pension and employment insurance, which are included in the consolidated fiscal balance, and an increase of 8.5 trillion won from the same period last year. 58.2 trillion won', of which 92.8% was used in the first quarter.
Treasury bond issuance spent 63.9 trillion won, accounting for 38% of the annual issuance until April, and increased in size by using 17.9 trillion won in April alone (15.3 trillion won based on competitive bidding).
As for the ‘Financial Trend’, as of January, the housing sales volume decreased by 38.2% compared to the same period last year, and the land sales volume plunged by 43.7%. In the decrease in tax revenue, corporate tax (24.3 trillion won) plunged by 6.8 trillion won from a year ago.
Value-added tax (16.5 trillion won) decreased by 5.6 trillion won due to an increase in refunds and deferment of tax revenue following support in the second half of 2021.
The twin deficits led to a financial crisis as the economic cycle rapidly fluctuated due to an increase in rigid security caused by riots and war abuses due to arms buildup and enemy making intensification in the hard-line conservative Reagan system. The Yoon Seok-yeol system introduced Reaganomics in the 1980s.
<South Korea’s ‘breaking North Korea’s military economy’ vs. North Korea’s ‘strengthening of South Korea’s twin deficit’. Dated 11 June 2022. Trade deficit widens, national tax revenue declines, twin deficits and inflation stuck, see March 1, 2023>