South Korea's budget deficit is expected to be higher than expected to surpass an earlier estimate of 3.4 trillion won (US$3.1 billion) this year due to lower-than-predicted economic growth and inflation, a parliamentary report said Sunday.

The National Assembly Budget Office (NABO) in October forecast the government to collect 218.2 trillion won in taxes based on a 5.6 percent nominal growth rate, expecting a tax revenue shortfall of over 3 trillion won of this year.

In the latest report, the NABO said the state tax income will be lower than the October estimate as the government cut this year's nominal growth forecast from 5.6 percent to 4.2 percent and slashed the real growth from 3.8 percent to 3.5 percent amid falling oil prices.

"This year's tax income is expected to decrease as last year's tax revenue was less than expected, and this year's growth projection was also trimmed," Shim Hye-jung, a senior official at the NABO, said. "(The NABO) has not yet assessed the detailed size of this year's tax deficit, but the amount will be larger than October's estimate."

The parliament's committee on budget and accounts also expected the nation's tax revenue shortage to be higher than forecast earlier, saying the government's "rosy" tax target may not become reality.

Economists remained downbeat on the tax revenue largely as a result of weak consumer sentiment and sluggish corporate earnings, combined with lingering uncertainties in the global economy.

"The government assigned the budget based on a 6.1 percent nominal economic growth, but it is hard to go over 5 percent this year considering internal and external factors," Lee Jun-hyup, a senior researcher at Hyundai Research Institute.

If that's the case, South Korea may record a tax deficit for the fourth consecutive year. The revenue shortage has been on the rise from 2.8 trillion won in 2012 to 8.5 trillion won in 2013, with this year's shortfall estimated at 13 trillion won, according to the finance ministry. (Yonhap)