The government is prioritizing regional growth as a key focus of its economic policy for the second half of the year, with plans to announce a detailed roadmap for the 'second phase of public institution relocation' within this timeframe. Additionally, it will provide significant support to businesses linked to the 5 poles 3 special growth engine through the enactment of the Mega Special Zone Act.
According to the '2026 Economic Growth Strategy for the Second Half of the Year' released on July 14, the government plans to unveil the second phase of the public institution relocation plan this year and begin the relocation process next year, focusing on leading institutions. The plan aims to minimize the number of institutions remaining in the capital region while considering the principles of concentrated placement linked to the 5 poles 3 special growth strategy.
To build the 5 poles 3 special growth engine, a key initiative of the Lee Jae-myung administration, the government will identify and select major industrial hubs by the third quarter of this year. Selected industries will receive comprehensive support through a three-pillar package that includes investment incentives (financial, fiscal, and regulatory), industrial ecosystem support (regulatory and technological), and business activity foundations (talent and infrastructure).
The government also plans to enact the Mega Special Zone Act within the year, which will provide extensive regulatory exemptions and package support for investment companies linked to the 5 poles 3 special growth engine. The strategy includes plans for new designations of regulatory-free special zones that connect two or more local governments.
Furthermore, over 40% of the total amount of the National Growth Fund will be invested in local areas to enhance funding and attract investment for regional economies.
In addition to financial support, measures will be implemented to attract private capital and talent to local areas through tax benefits. Companies investing in growth engine sectors will receive substantial investment incentives, while workers in those regions will benefit from a 'local preferential tax package' aimed at improving income stability and living conditions.
Next year, the number of local preferential projects will be significantly increased from the seven currently in place, and a local preferential index will be developed to strengthen the growth foundation of regions. To achieve this, the government plans to identify local preferential projects by the end of the second half of this year.
The government will also lower barriers for local companies in the public procurement market. Through a reorganization of the national contract system led by the Public Procurement Service, companies located in areas experiencing population decline will receive preferential points in price evaluations. Finally, the government aims to complete improvements to related systems, such as promoting a policy for the prioritized purchase of products from local small and medium-sized enterprises, by the end of the second half of the year.
Lee Hyung-il, First Deputy Minister of Finance, stated, 'We will do our utmost to ensure that regional growth can be a pillar for the rebound of potential growth rates. By the third quarter, we will select growth engines for the 5 poles 3 special regions and enact the Mega Special Zone Act to provide extensive support for investment companies linked to these engines within the year.'
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.