Where does South Korea’s public deficit come from?
A welfare state under construction in the fastest-ageing country: public revenue and spending since 1995, the end of surpluses, and a comparison with France.
Scope: South Korean general government (central government, local government, social security funds), national accounts, calendar years, OECD data. · Data as of Oct 30, 2026.
Key takeaways
- In 2025, South Korean general government spent ₩963tn (36.0% of GDP) against ₩903tn of revenue (33.7%): a deficit of ₩60tn, or 2.2% of GDP. Gross debt stands at 58.0% of GDP, and governments hold more financial assets than liabilities (+51% of GDP), notably the reserves of the National Pension fund.
- A welfare state under construction: public spending rose from 20.3% of GDP in 1995 to 35.3% in 2024. Social protection went from 2.3% to 9.3% of GDP (2023), health from 1.3% to 5.3%. Social contributions followed: from 2.9% to 9.3% of GDP.
- The fastest ageing: the share of people aged 65+ went from 5.8% in 1995 to 20.3% in 2025. The public pension scheme, created in 1988, is maturing: it costs 4.0% of GDP in 2022 according to the OECD, against 0.7% in 1990 (13.8% in France).
- The end of surpluses: +3.8% of GDP in 2007, +0.9% in 2019, −2.2% in 2024 and 2025. Between 2019 and 2024 spending gained +3.4 points (cash social benefits +1.4, other transfers +1.3) while revenue gained only 0.3 point (taxes on production −0.7, on income −0.5, contributions +1.1). The surplus of social security funds (+1.6% of GDP in 2024) hides the central government’s deficit (−3.3%).
- Compared with France, Korea spent 21.7 points of GDP less in 2024 (35.3% against 57.0%) and levied 18.1 points less (33.1% against 51.2%). Social protection weighs 9.3% of GDP against 23.2% in France (2023), health 5.3% against 8.8%; education costs the same (5.0%). On the revenue side, contributions (−7.2 points), taxes on production (−6.6) and taxes on income and wealth (−4.2) are all lower.
Revenue and spending, year by year
For each year: left bar = revenue (grey), right bar = spending (colours), stacked by type. The gap between the two bars is the deficit (or surplus). Tap an item in the legend to isolate it. Amounts in trillions of won. Korea only publishes the main spending functions (social protection is not detailed and interest sits in general services), up to 2023; the “by nature” view goes up to 2025. VAT is not separated from other taxes on production.
What widened (or narrowed) the deficit
Change of each item in points of GDP between two years (latest year with spending by function: 2023). Spending that rises, or revenue that falls, widens the deficit (bar to the left); revenue that rises narrows it.
Public balance: 3.8% of GDP in 2007, −0.9% in 2023, a change of −4.6 points. Contribution of spending: −8.7 pt; of revenue: +4.0 pt.
- Social protection (pensions, family, unemployment…)
- Health
- Education
- Economic affairs
- Other public spending
- Revenue
Detail by item · 2007 → 2023
| Detail by item | Side | 2007 | 2023 | Change (pt) | Effect on balance (pt) |
|---|---|---|---|---|---|
| Social protection (pensions, family, unemployment, disability…) | Spending | 4.48 | 9.32 | +4.84 | −4.84 |
| Health (hospitals, outpatient care, medicines) | Spending | 2.94 | 5.27 | +2.32 | −2.32 |
| Taxes on production and imports (VAT included) | Revenue | 10.24 | 8.99 | −1.25 | −1.25 |
| Education | Spending | 4.14 | 5.03 | +0.89 | −0.89 |
| Other revenue (sales, property income, transfers) | Revenue | 6.62 | 5.89 | −0.72 | −0.72 |
| Defence, police, justice | Spending | 3.17 | 3.77 | +0.60 | −0.60 |
| Environment, community amenities, culture | Spending | 2.74 | 3.10 | +0.36 | −0.36 |
| General services, including interest on debt | Spending | 4.21 | 4.38 | +0.16 | −0.16 |
| Economic affairs (transport, business support, energy) | Spending | 5.24 | 4.76 | −0.49 | +0.49 |
| Capital taxes (inheritance…) | Revenue | 0.26 | 0.89 | +0.62 | +0.62 |
| Taxes on income, profits and wealth | Revenue | 7.68 | 9.53 | +1.85 | +1.85 |
| Social contributions | Revenue | 5.91 | 9.46 | +3.55 | +3.55 |
| Total revenue | Revenue | 30.70 | 34.75 | +4.05 | +4.05 |
| Total spending | Spending | 26.93 | 35.62 | +8.69 | −8.69 |
| Balance | Balance | 3.77 | -0.87 | −4.64 | −4.64 |
The drivers
Pensions and health
Public spending on pensions (old age + survivors) and health, % of GDP, OECD social expenditure database (SOCX), since 1980.
- Pensions · 4.0% (2022)
- Health · 5.5% (2022)
The demographic driver
Share of people aged 65 and over (%), World Bank.
- Aged 65+ · 20.3% (2025)
Public balance
% of GDP. Negative = deficit.
- Balance · −2.2% (2025)
Gross debt and net financial worth
% of GDP, OECD, since 2009. A positive net worth means more financial assets than liabilities.
- Gross debt · 58.0% (2025)
- Net financial worth · 51.0% (2025)
Who carries the deficit?
Balance by level of government, % of GDP.
- Central government · −3.4% (2025)
- Local government · −0.1% (2025)
- Social security · 1.2% (2025)
South Korea and France
Same OECD accounts for both countries, same scope (general government), in % of GDP; OECD gross debt for both. With less Korean detail, spending is compared by main function and taxes on production include VAT. To the right of a gap chart, Korea is above France.
Public spending, % of GDP
- South Korea · 36.0% (2025)
- France · 57.3% (2025)
Public revenue, % of GDP
- South Korea · 33.7% (2025)
- France · 52.2% (2025)
Public balance, % of GDP
- South Korea · −2.2% (2025)
- France · −5.1% (2025)
Gross public debt, % of GDP
- South Korea · 58.0% (2025)
- France · 116.2% (2025)
Structure of revenue and spending
One bar per country and side, stacked by item, % of GDP (latest year with spending by function).
- Social protection (pensions, family, unemployment…)
- Health
- Education
- Economic affairs
- Other public spending
- Social contributions
- Taxes on income, profits and wealth
- Taxes on production (VAT included)
- Other revenue
Where Korea spends and levies more (or less) than France
Korea minus France, in points of GDP, same year. To the right, Korea is higher.
- South Korea − France · 2023
Spending by nature
What public money pays for: wages, benefits, purchases, investment… The largest gap is in cash social benefits (pensions, allowances).
- Cash benefits (pensions, allowances)
- Purchased benefits in kind (reimbursed care…)
- Public employee compensation
- Operating purchases
- Interest on debt
- Subsidies
- Investment
- Other transfers
Korea − France gap by type of spending, points of GDP
- South Korea − France · 2025
Yearly data
Show the table of revenue, spending, balance and debt by year
| Year | Revenue | Spending | Balance | Balance (% of GDP) | Debt (% of GDP) |
|---|---|---|---|---|---|
| 2025 | ₩903tn | ₩963tn | −₩60.1tn | −2.2% | 58.0% |
| 2024 | ₩849tn | ₩906tn | −₩57.5tn | −2.2% | 56.6% |
| 2023 | ₩837tn | ₩857tn | −₩20.8tn | −0.9% | 56.3% |
| 2022 | ₩860tn | ₩860tn | −₩0.2tn | −0.0% | 53.6% |
| 2021 | ₩779tn | ₩786tn | −₩7.0tn | −0.3% | 56.1% |
| 2020 | ₩686tn | ₩739tn | −₩53.0tn | −2.6% | 55.5% |
| 2019 | ₩670tn | ₩651tn | ₩18.5tn | 0.9% | 49.7% |
| 2018 | ₩648tn | ₩591tn | ₩57.2tn | 2.9% | 47.7% |
| 2017 | ₩604tn | ₩556tn | ₩48.1tn | 2.5% | 46.9% |
| 2016 | ₩565tn | ₩527tn | ₩37.9tn | 2.1% | 49.0% |
| 2015 | ₩523tn | ₩504tn | ₩19.0tn | 1.1% | 50.0% |
| 2014 | ₩494tn | ₩475tn | ₩18.3tn | 1.1% | 48.4% |
| 2013 | ₩471tn | ₩452tn | ₩18.6tn | 1.2% | 45.8% |
| 2012 | ₩458tn | ₩444tn | ₩14.1tn | 0.9% | 45.4% |
| 2011 | ₩435tn | ₩422tn | ₩13.1tn | 0.9% | 43.4% |
| 2010 | ₩403tn | ₩391tn | ₩11.2tn | 0.8% | 40.6% |
| 2009 | ₩373tn | ₩389tn | −₩15.9tn | −1.3% | 39.8% |
| 2008 | ₩368tn | ₩344tn | ₩24.3tn | 2.0% | 36.2% |
| 2007 | ₩348tn | ₩306tn | ₩42.8tn | 3.8% | — |
| 2006 | ₩307tn | ₩287tn | ₩19.5tn | 1.9% | — |
| 2005 | ₩280tn | ₩267tn | ₩12.6tn | 1.3% | — |
| 2004 | ₩255tn | ₩256tn | −₩1.0tn | −0.1% | — |
| 2003 | ₩242tn | ₩261tn | −₩18.1tn | −2.1% | — |
| 2002 | ₩219tn | ₩195tn | ₩24.2tn | 3.0% | — |
| 2001 | ₩198tn | ₩178tn | ₩20.4tn | 2.8% | — |
| 2000 | ₩181tn | ₩154tn | ₩27.0tn | 4.0% | — |
| 1999 | ₩153tn | ₩145tn | ₩8.1tn | 1.3% | — |
| 1998 | ₩137tn | ₩136tn | ₩1.2tn | 0.2% | — |
| 1997 | ₩133tn | ₩121tn | ₩12.4tn | 2.2% | — |
| 1996 | ₩120tn | ₩106tn | ₩14.8tn | 2.9% | — |
| 1995 | ₩104tn | ₩91.8tn | ₩12.1tn | 2.7% | — |
Sources and method
- OECD, government accounts. Table 12: total revenue and spending, taxes and contributions, spending by nature, balance by level of government. Table 11: spending by main function (COFOG), 1995–2023. Bank of Korea national accounts reported to the OECD, calendar years. France in the comparison is read from the same tables.OECD Table 12OECD Table 11 (COFOG)
- OECD, financial dashboard. General government gross debt and net financial worth, % of GDP, since 2009.OECD Financial dashboard
- OECD, social expenditure database (SOCX). Public spending on pensions (old age and survivors) and health, % of GDP, 1980–2022.OECD SOCX
- World Bank. Share of people aged 65 and over.World Bank SP.POP.65UP.TO.ZS
- Method. Constant won: current won adjusted by the GDP deflator (won of the latest year). Korea only reports the ten COFOG divisions: social protection is not detailed (pensions, family, unemployment…) and interest on debt stays in general services. It separates neither VAT from other taxes on production nor household from corporate income tax. The small gap between the COFOG total and total spending is put in “General services and interest”.
- Further reading. Ministry of Economy and Finance, Bank of Korea (ECOS), KOSIS, National Pension Service.Ministry of Economy and FinanceBank of Korea — ECOSKOSISNational Pension Service