ABSTRACT
This chapter1 provides an overview of the key characteristics of public finance in Korea, including a brief explanation of the country’s budgeting process and a fiscal condition analysis. Compared to the other OECD member countries, Korea has had a relatively healthy fiscal condition in that it has had a fiscal surplus for quite a long period of time until recently. However, it is possible that the fiscal health of Korea will deteriorate in the future. Challenges may come from multiple factors such as the aging population, sluggish economic growth, declining revenue, expenditure growth (especially social spending), and debt accumulation. All of these factors may undermine the fiscal sustainability of Korea, requiring the fiscal authorities of Korea to make preemptive efforts to overcome the possible challenges.
