South Korea Plans Record 800 Trillion Won Budget for 2027

The South Korean government and the ruling Democratic Party (DP) have announced plans for a record high budget of approximately 800 trillion won for 2027. This figure represents a more than 10 percent increase from the initial 2026 budget proposal of 727.9 trillion won, marking the largest year on year increase since 2009. President Lee Jae Myung stated that the government should transition to a productive fiscal strategy rather than focusing solely on managing fiscal capacity to counter a period of low growth.

The proposed budget emphasizes investment in future industries to secure national leadership. Key priorities include artificial intelligence, semiconductors, bio, culture, defense, and energy. Specifically, the government aims to develop frontier level AI models by securing 10,000 graphics processing units and pursuing a lunar landing by 2030. The administration also plans to implement three megaprojects focused on AI capacity and regional growth, with semiconductor support allocated as a special account under the National Finance Act.

Additional spending measures include full tuition support for students at regional national universities, record high subsidies for electric vehicle purchases, and support for nuclear powered submarines. Budget Planning Minister Park Hong keun explained that a future response fund will be created using increased tax revenue from the semiconductor boom to fund these strategic investments instead of short term spending.

The government is scheduled to announce the budget at a Cabinet meeting on September 1 and present it to the National Assembly on September 3. The deadline for the legislature to pass the budget bill is early December.