South Korea: Government budget balance, percent of GDP

(measure: percent; source: The World Bank)

South Korea: Government budget balance as percent of GDP

: For that indicator, The World Bank provides data for South Korea from 1990 to 2011. The average value for South Korea during that period was 1.69 percent with a minumum of 0.02 percent in 2009 and a maximum of 4.15 percent in 2000.

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The budget balance in South Korea and other countries is calculated as the difference between the taxes collected by the government and the government spending. The budget could be in surplus (or deficit) if the tax revenue is greater (smaller) than the spending. A budget surplus is recorded with a plus sign and a deficit is recorded with a minus sign. The budget balance is usually reported as percent of GDP. This tells us how large the deficit or surplus is relative to the economy.

Most governments try to keep their deficits below 3 percent of GDP. Here is the reason. When the government runs a deficit, they borrow money and, as result, their debt increases. However, it their debt goes up by 3 percent of GDP and, meanwhile, the GDP has grown by 3 percent, then the debt to GDP ratio remains the same. The debt has increased but so has income. Looking across many countries over time, GDP tends to increases by about 2-3 percent per year. Hence, governments try to keep their deficits below 3 percent of GDP. Government budget balance, percent of GDP rankings around the world. Create and download charts for South Korea Government budget balance, percent of GDP and other indicators with the country comparator.

World Bank definition: Cash surplus or deficit is revenue (including grants) minus expense, minus net acquisition of nonfinancial assets. In the 1986 GFS manual nonfinancial assets were included under revenue and expenditure in gross terms. This cash surplus or deficit is closest to the earlier overall budget balance (still missing is lending minus repayments, which are now a financing item under net acquisition of financial assets).