Social Security Financing and Mandatory Spending in 2017

Abstract

Korea’s tax and fund revenues for 2017 are projected to total KRW414.3 trillion, up 5.9 percent from the previous year’s KRW391.2 trillion. This projection is premised on the government’s assumption of an 8.7-percent growth in tax revenues. The rate of increase is set considerably higher this year than in the past, as last year was a particularly good year for tax collection. Government outlays are expected to grow by KRW14.1 trillion (3.7 percent) from 2016 to KRW400.5 trillion. For the first time in 4 years, the projected rate of increase in outlays is set lower than the rate of increase in revenues, reflecting the policy intent to restore and maintain mid-to-long-term fiscal stability. Estimated at KRW682.4 trillion, Korea’s public debt topped 40 percent of GDP this year, a level which, although still deemed safe, seems deserving of attention for the sheer pace at which it is rising, especially with the general account’s deficit-covering subsidies on the steep increase.