S. Korea's fiscal deficit drops sharply in July

SEOUL, Sept. 23 (Yonhap) -- South Korea's fiscal deficit fell sharply in July
from the previous month as the government spent far less money to bolster the
weak economy, the finance ministry said Wednesday.
The country's cumulative fiscal deficit came to 17.65 trillion won (US$14.75
billion) as of late July, down 10.3 trillion won from a month earlier, according
to the Ministry of Strategy and Finance.
"With most of the money for economic stimulus programs being injected into the
local economy by June, state earnings have been able to close the gap with
spending, helping to reduce the deficit in the consolidated central government
balance," a ministry official said.
Seoul front-loaded state budget spending in the first half of 2009 to cope with
the global financial crisis brought on by the collapse of Lehman Brothers last
year. The country has been struggling to deal with drops in private consumption,
business investment and exports, leading to forecasts the economy will contract
by 1.5 percent on-year this year.
The ministry, in charge of the country's overall economic policies, said earnings
in the seven months of this year including taxes and ordinary earnings reached
159.73 trillion, while outlays covering ordinary expenditures, lending and wages
for government workers reached 177.38 trillion won.
If there are no sudden spikes in state spending for the remainder of the year, it
may be possible to meet the annual fiscal deficit target of 22 trillion won, the
ministry added.
Concerns were voiced about the country's fiscal health when the accumulated
fiscal deficit shot up to 27.95 trillion won at the end of June from 20.27
trillion won the month before.
yonngong@yna.co.kr
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