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Korea's fiscal balance improves in first two months on higher tax revenue

Published: 09 Apr. 2026, 16:23

The Ministry of Planning and Budget plaque is seen at the government complex in Sejong on Jan. 6. [YONHAP]

Korea's fiscal balance improved in the first two months of the year compared with a year earlier, despite an increase in total government spending, driven by higher tax revenue, the Ministry of Planning and Budget said Thursday.

The managed fiscal balance, a key gauge of fiscal health calculated on stricter terms, recorded a deficit of 14 trillion won ($9.4 billion) during the January to February period, according to the ministry.

The reading marks the 10th largest deficit on record for the cited period but is sharply down from a 17.9 trillion won deficit posted over the same period last year.

Tax revenue reached 71 trillion won in the cited period, up 10 trillion won from a year earlier.

In detail, income taxes rose 2.4 trillion won on higher wages and increased capital gains from real estate transactions, while value-added tax collections increased by 4.1 trillion won, driven by lower refunds and higher import revenue, the data showed.

Non-tax revenue and fund revenue also rose by 5.3 trillion won and 3.3 trillion won, respectively, compared with last year.

Total government expenditures amounted to 128.7 trillion won in the January to February period, up 12 trillion won from the same period last year.

The fiscal balance, total revenue minus total spending, posted a 7.1 trillion won deficit through February.

Yonhap