Seoul: South Korea's fiscal balance improved from a year earlier in the first five months of 2026 on strong tax revenue amid improved corporate earnings and a bullish stock market, the budget ministry said Thursday. The managed fiscal balance, a key gauge of fiscal health calculated under stricter criteria, posted a deficit of 54.2 trillion won (US$35.9 billion) as of the end of May, marking an improvement of 6.8 billion won from the same period in 2025.

According to Yonhap News Agency, tax revenue reached 199.9 trillion won over the January-May period, up 27.5 trillion won from a year earlier. The amount of corporate tax collected came to 46.6 trillion won, up 3.9 trillion won from the previous year on strong corporate earnings. Following major bonuses handed out by businesses, income tax revenue shot up 9 trillion won to 66.7 trillion won. The growth was also attributable to higher capital gains tax revenue following an increase in the number of homes traded.

The securities transaction tax rose 4.1 trillion won to 5.4 trillion won following the recent bullish run on the main bourse. Non-tax revenue and fund revenue rose by 7.6 trillion won and 15.1 trillion won, respectively, from a year earlier. Total government expenditures amounted to 353.3 trillion won in the January-May period, up 38.1 trillion won from the same period last year. As of the end of May, the central government's outstanding debt stood at 1,345.2 trillion won, up 23.6 trillion won from a month earlier.