Abu Dhabi:South Korea's fiscal deficit through August has narrowed to its lowest point in eight years, driven by a significant increase in corporate tax revenue from semiconductor companies, according to government data released Thursday.

According to Namibia Press Agency, the consolidated fiscal balance, which represents gross revenue minus gross expenditure, recorded a surplus of 5.0 trillion won (3.7 billion U.S. dollars) in the January-August period. This marks a turnaround from a deficit of 53.7 trillion won during the same period last year, as reported by the Ministry of Planning and Budget.

The managed fiscal balance, which excludes social security funds to provide a clearer picture of fiscal health, showed a deficit of 43.0 trillion won in the first eight months of 2026. This is the lowest level for the period since 2018. Gross revenue, including both tax and non-tax revenues, increased by 98.0 trillion won from the previous year, reaching 529.7 trillion won over the eight-month period.

Tax revenue alone surged by 69.1 trillion won to 329.9 trillion won, largely due to a sharp rise in corporate tax collections. This increase was driven by a booming artificial intelligence sector, which has led to soaring global demand for South Korean memory chips. Corporate tax collections rose by 28.2 trillion won, while income tax and value-added tax collections increased by 14.4 trillion won and 7.4 trillion won, respectively.

Additionally, securities transaction tax revenue grew by 7.0 trillion won due to increased stock trading volume. Meanwhile, gross expenditure through August amounted to 524.7 trillion won, an increase of 39.3 trillion won from the previous year.

The cumulative fiscal spending resulted in the central government debt rising to 1,372.1 trillion won at the end of August, an increase of 17.9 trillion won compared to the previous month.