2023-10-09 21:00:00
Largest loan in 13 years due to insufficient tax revenue
Exceeding the annual scale during the pandemic
As the government suffered from a tax revenue shortfall this year, it borrowed over 113 trillion won from the Bank of Korea. It was the largest amount borrowed in 13 years, with the interest paid reaching 150 billion won.
According to the data on ‘Late of temporary loans and interest amounts to the government’ submitted by the Bank of Korea to Yang Kyung-sook, a member of the Democratic Party of Korea on the Planning and Finance Committee of the National Assembly on the 9th, the total cumulative amount of temporary loans borrowed by the government from the Bank of Korea from January to September was 113.6 trillion won. As of the end of September, the amount alone was the largest since 2010, when the statistics were computerized. It is 3.32 times the total accumulated loan amount last year (KRW 34.2 trillion), and also exceeds the KRW 102.913 trillion annual loan amount in 2020, when government spending expanded due to the spread of COVID-19. As the number of loans increases, the interest paid by the government to the Bank of Korea this year amounts to 149.7 billion won.
The Bank of Korea’s temporary loan system to the government is a means used by the government to fill temporary fund shortages that occur due to the time difference between revenues and expenditures during the fiscal year. It is similar to an individual opening and using a negative bank account.
The Bank of Korea’s one-time loan to the government also has a limit, like a negative bank account. This year, up to 50 trillion won can be borrowed, including 40 trillion won from the consolidated account, 2 trillion won from the grain management special account, and 8 trillion won from the public fund management fund.
Accordingly, the government is repeatedly borrowing and repaying to the extent that the balance of the Bank of Korea loan does not exceed 50 trillion won. The average balance of temporary loans to the government this year was 5.8145 trillion won. It is 3.3 times the average balance last year (KRW 1.761 trillion) and is higher than the amount in 2020 (KRW 5.1091 trillion), the first year of COVID-19. However, as of the end of September, the balance of the government’s temporary loan to the Bank of Korea is 0 won, and 113.6 trillion won borrowed has now been fully repaid.
The fact that the government used the ‘Bank of Korea Minus Account’ a lot this year means that it often used resources in a hurry because the taxes (revenues) collected were insufficient compared to where they might be used (expenditures). The government’s consolidated fiscal balance, which subtracts total expenditures (391.2 trillion won) from total revenue (353.4 trillion won), recorded a deficit of 37.8 trillion won as of the end of July.
1696887380
#government #borrowed #trillion #won #Bank #Korea #money #spent #interest #January #September #amounted #billion #won
