The South Korean government is set to enhance its financial role by preparing a record budget and establishing a future response fund to seize the golden opportunity for national development during a period of structural transition, including industrial transformation.
President Lee Jae-myung convened the '2026 National Financial Strategy Meeting' at the Blue House on July 13. During the meeting, Minister of Strategy and Finance Park Hong-geun assessed the financial operating conditions and presented the budget proposal for the upcoming year along with medium-term financial management plans.
Minister Park noted that since the establishment of the people's sovereignty government, the country has maintained an active fiscal stance, leading to an economic rebound and a semiconductor boom. However, he emphasized the need to continue expanding investments to secure the 'golden time' as the nation enters a period of structural transition marked by advancements in artificial intelligence and industrial transformation. He stated, "Total expenditures for 2027 will be structured at over 800 trillion won, an increase of more than 10% compared to the 2026 budget."
In response, the government outlined four key investment directions: a shift in the national growth paradigm, local-led growth, improvement of polarization structures, and the establishment of a foundation for public safety and peace. Notably, the government plans to prioritize funding for three mega-projects: semiconductors, AI data centers, and physical AI.
The government aims to increase investment capacity not only by relying on additional tax revenues but also through the largest expenditure restructuring in history.
Minister Park mentioned, "National tax revenue for 2027 is expected to exceed 500 trillion won, marking the highest tax revenue ever. The future response fund will be a way to utilize this valuable revenue." He added, "By combining increased tax revenue with rigorous expenditure restructuring, we will create the largest investment capacity in history."
The establishment of the future response fund aims to accumulate additional tax revenues that exceed long-term trends and focus investments in four key areas: the youth generation, growth drivers, local regions, and talent development.
* This article has been translated by AI.
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