S.Korea to See Budget Deficit

January 12, 2015 Taxation in South Korea

SEOUL – South Korea looks set to face a fourth year of budgetary deficits.

In a parliamentary report issued on January 11th the government of South Korea indicated that the budgetary deficit over the course of 2015 may exceed expectations, and reach a level of KRW 3.4 trillion.

Previously the government had forecast that the tax revenues for the year would reach a level of KRW 218.2 trillion, resulting in a budget deficit of KRW 3 trillion, based on a nominal growth rate of 5.6 percent, however, the growth level has now be revised to 4.2 percent.

If the forecasted deficit is realized, Korea will see a deficit for the fourth year in a row.

According to some economic experts, the continuing budget deficits can be attributed to long-standing declines in consumer confidence and activity, and a subsequent reduction in corporate profits.

Photo By: Karl Baron