S. Korea swings to Q1 budget deficit amid economic slump

SEOUL, May 21 (Yonhap) -- South Korea swung to a budget deficit in the first
quarter of this year due to decreased tax revenue amid an economic slump and more
stimulus spending, a government report showed Thursday.

The country's consolidated budget balance switched to a deficit of 12.4 trillion
won (US$9.9 billion) in the January-March period from a 20.7 trillion won surplus
a year earlier, according to the report by the Ministry of Strategy and Finance.
Tax and other revenues totaled 68.6 trillion won in the first quarter, down from
76.1 trillion won a year ago, while government expenditures surged to 81 trillion
won from 55.4 trillion won.
The first-quarter deficit was attributed to reduced tax revenues amid a
protracted economic slowdown and the frontloading of fiscal spending to foster an
economic recovery.
The nation's full-year budget deficit is expected to reach 22 trillion won,
compared with a surplus of 11.9 trillion won in 2008, the ministry said.
A consolidated balance is tallied by adding up the government's general and
special accounts, various state-run funds and other sources of revenue, then
deducting total spending from that amount. It is designed to give a broad picture
of how the government is running the country's finances.
South Korea's fiscal soundness is feared to worsen as the government has unveiled
diverse stimulus measures including tax cuts and expanded state spending to
kick-start the economy hit hard by a protracted global recession.
Last month, parliament endorsed a record 28.4 trillion won extra budget mostly
aimed at generating jobs and bolstering anemic domestic demand.
kokobj@yna.co.kr
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