South Korea's fiscal deficit in the first half shrank by 9.9 trillion won from the same period last year. The fiscal balance improved as the rise in total revenue, led by national tax revenue, outpaced the increase in total spending.

The Ministry of Economy and Finance said in its August issue of Monthly Fiscal Trends released on Wednesday that the cumulative managed fiscal balance at end-June posted an 84.4 trillion won deficit.

That compared with a 94.3 trillion won deficit a year earlier, narrowing by 9.9 trillion won. The ministry said the managed fiscal balance deficit as of June was the lowest level since 2023.

The managed fiscal balance is an indicator of the government's effective fiscal condition. It is calculated by excluding the balance of social security funds such as the National Pension Service from the consolidated fiscal balance.

The consolidated fiscal balance in the first half was tallied at a 43.9 trillion won deficit. That improved by 24.7 trillion won from a 68.6 trillion won deficit a year earlier. The balance of social security funds recorded a 40.5 trillion won surplus.

A recovery in tax revenue contributed to the improvement in the fiscal balance. Total revenue in the first half was 381.9 trillion won, up 61.3 trillion won from a year earlier.

National tax revenue totaled 223.0 trillion won, up 33.0 trillion won. Income tax rose by 10.4 trillion won, while the securities transaction tax rose 5.2 trillion won, value-added tax 4.9 trillion won and corporate tax 4.3 trillion won. Non-tax revenue was 28.4 trillion won, up 9.0 trillion won, and fund revenue was 130.6 trillion won, up 19.3 trillion won.

Total spending over the same period was 425.8 trillion won, up 36.6 trillion won from a year earlier. The rise in total revenue exceeded the increase in total spending by 24.7 trillion won, narrowing the consolidated fiscal balance deficit by that amount.

Central government debt stood at 1,338.5 trillion won at end-June, down 6.8 trillion won from the previous month. Government bonds totaled 1,336.8 trillion won, down 6.8 trillion won over the same period. Treasury bonds accounted for 1,229.7 trillion won, down 4.3 trillion won from the previous month.