South Korea Proposes Record 821 Trillion Won 2027 Budget

The Government of South Korea has proposed a record 821 trillion won ($596.92 billion) expenditure plan for 2027, representing a 12.8 percent increase over 2026. The budget marks a shift from fiscal austerity toward expansionary spending, funded by a tax windfall from the semiconductor industry, specifically profits from Samsung Electronics and SK Hynix. National tax revenue is projected to reach 584.4 trillion won.

Central to the proposal is a mega project allocating 21.3 trillion won to AI, semiconductors, and data center infrastructure, alongside 2.6 trillion won for a special semiconductor budget. The plan also includes 3.4 trillion won for strategic weapons and a nuclear-powered submarine program. To manage excess revenue, the government will establish a Futures Response Fund, channeling 162.3 trillion won into reserves and programs for education, youth welfare, and regional development.

President Lee Jae-myung championed the policy but noted that an interest rate rise is now unavoidable despite potential risks to borrowing costs for the disadvantaged. Budget Minister Park Hong-keun stated the plan seeks to transform the economy and reduce the debt-to-GDP ratio to 48.3 percent, though he warned that a shrinking working-age population and stagnant productivity remain structural risks. The proposal now awaits approval from the National Assembly.