Public sector net lending in South Korea hits record high in 2017

South Korea's public sector net lending hit a record high last year, thanks to a robust gain in tax revenues, data showed Friday.

Net lending, which refers to total revenue minus total expenditure, came to 53.7 trillion won (US$48.36 billion) in 2017, up from the previous year's 47.7 trillion won, according to the data by the Bank of Korea (BOK).

This is the highest annual net lending since the central bank began compiling statistics on the public sector account in 2007. It is also the fourth consecutive year that the country's public sector balanced stayed in the black.

Total revenue in the public sector grew 5.7 percent on-year to 815.0 trillion won in 2017, while total expenditures advanced 5.3 percent on-year to 761.3 trillion won, the data showed. Both revenue and expenditure reached an all-time high.

“The record net lending is attributable to a solid growth in tax revenues and ample social security funds,” BOK official Kim Seong-ja said, noting that tax revenues jumped by 27.9 trillion won to 348.6 trillion won last year.

Central government posted a deficit of 3.7 trillion won in 2017, down from a 12.5 trillion won loss the previous year, and local governments logged a combined surplus of 9.3 trillion won, according to the central bank.

The public sector deficit in South Korea accounted for 3.1 percent of the nominal gross domestic product (GDP) in 2017, which is a bit higher than in major countries such as Switzerland, Britain, Australia and Japan, the data showed.

APP