The Ministry of Finance has proposed a budget for next year totaling 39.7 trillion won, an increase of 5.4 trillion won from this year. The plan includes the establishment of a strategic investment account within the Korea Investment Corporation (KIC) and a new strategic export financing fund to support large-scale, long-term export projects.
On September 1, the Ministry announced the details of the '2027 Budget and Fund Management Plan,' which reflects a 15.7% increase over this year's main budget.
Breaking down the budget, 16 trillion won is allocated for the general budget, while 38.1 trillion won is designated for funds. The Public Fund Management Fund accounts for the majority at 35 trillion won, with the Economic Development Cooperation Fund (EDCF) at 19 trillion won and the National Property Management Fund at 12 trillion won.
The government plans to enhance the KIC's role as a sovereign fund by adding a strategic investment account. This account will focus on long-term investments in strategic industries such as artificial intelligence (AI) and semiconductors, while also attracting foreign sovereign funds to invest domestically.
The budget proposal includes a cash contribution of 500 billion won to the strategic sovereign fund. The Ministry's project budget for the Future Response Fund totals 950 billion won, including the strategic sovereign fund.
To strengthen financial support for large-scale, long-term strategic export projects, the government is pushing for the establishment of the strategic export financing fund. This initiative aims to secure future growth drivers and enhance the overseas bidding competitiveness of domestic companies by utilizing the sovereign fund and export financing.
In response to supply chain uncertainties due to conflicts in the Middle East, the investment resources allocated for this purpose will increase from 10 billion won this year to 200 billion won next year, a twenty-fold increase. These funds will be used to establish domestic and international production bases for key supply chain items that are difficult to attract private investment due to low profitability or long payback periods.
The EDCF will also launch the 'K-AI Package' project, starting with the construction of an AI and digital technology training center in Tanzania, valued at $170 million. This initiative aims to support the digital transformation of developing countries while expanding opportunities for domestic AI companies to enter foreign markets.
The budget for the government-wide super innovation economy project will increase from 2.7 trillion won this year to 3.6 trillion won next year, a 33.5% rise. The focus will be on securing core technologies and expanding support for demonstration and commercialization to accelerate the outcomes of 15 major projects.
Funding for key materials and components in future industries, such as next-generation power semiconductors and graphene, will rise from 113.8 billion won to 161.5 billion won. In the climate, energy, and future response sectors, 1.7 trillion won will be allocated, an increase of 602.2 billion won from this year.
Funding related to 'K-Boom Up' initiatives, including K-content and K-food, will expand from 1.45 trillion won to 1.65 trillion won. The budget for new projects in the super innovation economy, such as sensors and actuators for physical AI and secondary batteries for humanoids, will increase from 11.6 billion won to 62 billion won.
Additionally, a new project worth 20 billion won will be initiated to build insurance infrastructure for advanced technology products and services, as well as an export and bidding information system. The budget proposal will be submitted to the National Assembly on the 3rd and will undergo review by the standing committee and the special committee on budget and accounts before final approval.
* This article has been translated by AI.
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