Korea Posts 1st Budget Surplus in 4 Years
By Lee Hyo-sik
Staff Reporter
The government posted a budget surplus last year for the first time in four years as its revenue, including taxes and the sales of state-owned assets, rose at a faster pace than the expenditure.
The Ministry of Strategy and Finance said Friday that the government budget account, which excludes social security-related balance, recorded 3.6 trillion won in the black in 2007, the first budget surplus since 2003.
After registering a 1 trillion won surplus in 2003, the budget account had posted shortfalls from 2004 through 2006 as the previous Roh Moo-hyun administration spent record amounts of money to expand state-financed welfare projects.
The broader consolidated fiscal budget, which includes general and special accounts and state funds as well as welfare-related spending, posted a 33.8 trillion won surplus last year, the largest ever. Government revenues totaled 243.6 trillion won, while expenditures came to 209.8 trillion won.
The ministry said tax revenues jumped by 23.4 trillion won from 2006 and revenues from operating the National Pension Fund and other state-run funds increased 7.5 trillion won over the one-year period. Expenditure rose only 3.9 trillion won from a year earlier.
It projected tax revenues will grow at a solid pace this year, boosting overall government income, while expenditures will rise at a slower rate as the government is scheduled to pay less in covering public fund losses.
``Tax revenues increased by about 6 to 7 trillion won last year on the relatively strong economy. We expect to see solid revenue growth this year. If we keep a lid on a spending increase as planned, we will be able to use the budget surplus to lower the national debt,'' Vice Strategy and Finance Minister Bae Kook-hwan said.
Korea's national liabilities currently account for 33.2 percent of its gross domestic product (GDP), substantially lower than the Organization for Economic Cooperation and Development average of 75 percent. But the government plans to lower the debt-to-GDP-ratio to below 30 percent within the next five years.
Meanwhile, the ministry said it spent 4.5 trillion in the first two months of the year to expand a range of social security-related projects aimed at helping low-income earners and small businesses. It also spent 500 billion won in January and February to help create jobs.