SEOUL, Nov. 9 (Korea Bizwire) — Local governments across South Korea recorded steep budget deficits last year due to increased spending to cope with COVID-19, the interior ministry said Tuesday.
According to an analysis by the ministry, the consolidated fiscal balance of 243 local governments for the fiscal year of 2020 recorded a deficit of 8.7 trillion won (US$7.4 billion).
Last year’s deficit tally marked a sharp contrast with a budget surplus of 6 trillion won recorded in 2019.
The ministry cited the local government’s expansionary fiscal spending toward supporting small businesses and self-employed workers, as well as a means of vitalizing local economies hit hard by the pandemic, as the key factor in the deficit accumulation.
According to the ministry, last year’s consolidated fiscal balance for the nation reached a deficit of 71.2 trillion won.
The combined due debt of local governments reached 23.9 trillion won in 2020, up 4.8 trillion from a year ago, the ministry added.