Seoul: The South Korean government has proposed an 820.9 trillion-won (US$595 billion) state budget for 2027, marking a 12.8 percent increase in fiscal spending compared to the previous year. The budget, unveiled by the budget ministry on Tuesday, outlines allocations for various sectors, including health, education, and defense, with a focus on enhancing national welfare and development.
According to Yonhap News Agency, the proposed budget allocates 289 trillion won to health, welfare, and labor, representing a 9.3 percent increase. Education spending is set to rise by 10.8 percent to 110.7 trillion won. The culture, sports, and tourism sectors will see a substantial increase of 20.4 percent, amounting to 11.6 trillion won. Environmental spending is projected to grow by 5.2 percent, reaching 14.6 trillion won.
Key areas such as research and development and industrial sectors, including small and medium-sized enterprises and energy, will receive significant boosts of 11.2 percent and 29.7 percent, respectively. Other sectors receiving increased funding include social overhead capital, agriculture, fisheries and food, defense, diplomacy, and public safety.
A new initiative, the Future Fund, will be established with 162.3 trillion won in windfall tax revenue. Total revenue for 2027 is forecasted to reach 880.8 trillion won, a 30.4 percent increase from 2026, with national taxes contributing 584.4 trillion won, up by 49.8 percent.
Despite the increased spending, the government aims to manage fiscal health by reducing the fiscal deficit to 3.1 trillion won for 2027, a significant improvement from the 107.8 trillion won shortfall in 2026. National debt is expected to rise to 1,519.8 trillion won but will constitute a lower percentage of GDP, dropping from 51.6 percent in 2026 to 48.3 percent in 2027.
The fiscal management plan for 2026-2030 aims for an average annual increase of 8.4 percent in government spending and 9.9 percent in revenue, indicating a strategic approach to bolster the nation's economic stability and growth.