The managed fiscal deficit for January-September this year came to 32 trillion won. The deficit for the same period last year was 102.4 trillion won. It shrank by 70.5 trillion won in a year. It is the smallest deficit in eight years, since 2018 (minus 17.3 trillion won). It is the result of a sharp rise in corporate tax revenue driven by the semiconductor supercycle.
The Ministry of Planning and Budget released the November edition of its "Monthly Fiscal Trends" on the 12th. Cumulative total revenue for January-September was 605.4 trillion won, up 124.6 trillion won from a year earlier.
The increase in revenue was led by national taxes. National tax revenue was 385 trillion won, up 95.4 trillion won from a year earlier. Of this, corporate tax revenue was 127.8 trillion won, an increase of 51.9 trillion won. This was thanks to improved operating results at major companies, including semiconductor makers. Companies made their August interim prepayments based on strong first-half earnings. September installment payments were also solid.
A ministry official said, "Thanks to improved business results centered on semiconductors, national tax revenue, including corporate tax, rose sharply." He added that, as in the previous month, companies' corporate tax installment payments were strong this month, lifting total revenue significantly.
Income tax rose by 15.7 trillion won. Earned income tax increased as performance bonuses grew. Capital gains tax also rose on higher real estate transaction volume. Revenue from the special tax for rural development (10.3 trillion won) and the securities transaction tax (7.5 trillion won) was also strong, influenced by higher stock trading value and the restoration of tax rates. Value-added tax rose by 7.4 trillion won on the back of a consumption recovery.
Non-tax revenue was 34 trillion won, up 9.3 trillion won. Fund revenue, including National Pension Service premiums, was 186.4 trillion won, up 19.9 trillion won from a year earlier.
Total expenditure was 584.9 trillion won, up 40.7 trillion won. The execution rate against the annual budget was 77.7%.
The increase in revenue far outpaced the increase in spending. As a result, the consolidated fiscal balance posted a surplus of 20.4 trillion won, compared with a deficit of 63.5 trillion won in the same period last year. The improvement of 83.9 trillion won is the highest since the statistics began to be published in 2014. The managed fiscal balance is the consolidated fiscal balance minus the surplus in social security funds. It shows the government's real fiscal position. In terms of year-on-year improvement, both indicators are the largest on record.
Central government debt at the end of September was 1,369.4 trillion won, down 2.7 trillion won from the previous month. This was because quarter-end maturing Korea Treasury Bond redemptions (18.6 trillion won) exceeded issuance for the month (17.4 trillion won). Compared with the end of last year's settlement, however, it rose by 101.3 trillion won.
Treasury bond issuance in October was 16.4 trillion won (12 trillion won through competitive bidding). Cumulative issuance for January-October was 196.1 trillion won, equivalent to 87.7% of the annual issuance limit. The outstanding balance at the end of October was 1,271.7 trillion won. Foreign holdings stood at 326.5 trillion won (25.7% of the total), up 6.9 trillion won in a month.
Financing conditions also improved. As supply-demand pressure eased, the financing rate fell to 4.07% from 4.25% the previous month. The bid-to-cover ratio rose to 271% from 243% the previous month.