[Edaily Reporter Hwang Byeong Seo ] On the 2nd, President Lee Jae-myung stated, “The 2027 budget proposal prepared by the government of popular sovereignty is a ‘future-securing budget’ aimed at building an irreplaceable Republic of Korea and transforming it into a leading nation, as well as a ‘growth-spreading budget’ that will translate national growth into growth for the people.” The plan calls for increasing total spending next year to 820.9 trillion won to focus investment on future growth engines—such as artificial intelligence (AI) and semiconductors—and support for people’s livelihoods.

In his policy address on the 2027 budget proposal delivered at the National Assembly that morning, President Lee stated, “Building on our nation’s incomparably elevated status and dramatically expanded economic power, we have solidified the foundation for a great leap forward by focusing investment on future growth engines and reducing disparities, ensuring that everyone can equally enjoy the opportunities and benefits of growth.”
However, while noting positive outlooks—such as the potential growth rate rebounding for two consecutive years for the first time in about 40 years—President Lee observed, “Despite these achievements, the shadow of inequality and polarization still looms heavily over our society,” adding, “The barrier to a first job remains high for young people, small business owners face deep hardships, and the recovery of regional economies is slow.” He emphasized, “To overcome the limitations of ‘K-shaped growth,’ where inequality and polarization are deepening, we must move beyond the outdated dichotomy of ‘growth versus distribution’ and propose a new growth formula suited to the changing times and circumstances.” He added, “We must make a major shift toward ‘growth for all,’ where every region and every citizen equally enjoys the opportunities and benefits of growth, rather than growth for only a select few.”
◇ Total Expenditures Up 12.8%…107.2 Trillion Won in Expenditure Restructuring
The government has formulated next year’s total expenditure at 820.9 trillion won, a 12.8% increase from this year. This marks the largest scale and highest growth rate in history. President Lee stated, “Next year’s budget proposal was formulated around three principles: investing boldly without wasting resources on inefficiency, prioritizing fiscal spending over tax expenditures, and giving preferential treatment to local governments to promote balanced national development.”
The government implemented spending restructuring totaling 107.2 trillion won across 6,476 projects, including the elimination of approximately 2,100 projects. It converted 1.9 trillion won in tax expenditures—including marriage and childbirth tax credits—into direct fiscal support and increased the number of projects prioritizing local regions to 61. The managed fiscal balance deficit as a percentage of GDP is projected to decline from -3.9% this year to -0.1% next year, and the national debt-to-GDP ratio is also expected to fall from 51.6% to 48.3%. President Lee explained, “Although we are issuing government bonds, almost all of the proceeds will be used to repay existing bonds, resulting in virtually no net increase in government debt.” The government plans to establish a Future Response Fund to serve as a fiscal stabilization mechanism for investments aimed at boosting potential growth and responding to fluctuations in tax revenue.
◇ 43.3 trillion won budget for youth… Expanded investment in AI and semiconductors
The government will strengthen support for people’s livelihoods to alleviate disparities among vulnerable groups, regions, and generations. It will shift major social security benefits from an application-based system to an automatic system and raise the median income by a record 6.7%. The monthly livelihood allowance for a four-person household will be increased to 2,218,000 won, and the number of jobs for seniors will be expanded to 1.18 million. The criteria for dependents of people with severe disabilities will also be abolished. The government will provide 500 billion won in support for special debt restructuring for small business owners with long-term delinquent debts and introduce a new 1.5 million won childcare allowance for the self-employed and freelancers. Regional gift certificates will be issued in the amount of 25.6 trillion won, and Onnuri gift certificates in the amount of 4.5 trillion won. The budget for youth programs has been allocated at 43.3 trillion won, a 53.5% increase from this year. An internship semester for college students will be introduced, and support for work experience, training, and job search assistance will be expanded to 720,000 people. Support for the “Our Children’s Self-Reliance Fund” and the “Youth Future Savings Account” will also be promoted. A 1 million won marriage support grant for newlyweds, a “Welcome Baby” grant of up to 20 million won upon childbirth, and a basic child allowance will also be provided.
◇21.3 Trillion Won for AI, Semiconductors, and More… Largest-Ever R&D Budget
We will invest 21.3 trillion won in three major megaprojects, including AI and semiconductors. We will support the expansion of semiconductor production infrastructure and the demonstration of physical AI, and concentrate 4.7 trillion won in investment on the development of proprietary AI models. We will allocate 13.8 trillion won to the top 10 strategic technology sectors. The R&D budget stands at 39.5 trillion won—an increase of 4 trillion won from this year and the largest in history. The government will invest 2.8 trillion won in expanding renewable energy and increase the number of electric vehicles eligible for subsidies to 430,000. The culture budget totals 11.6 trillion won.
The defense budget has been set at 73.3 trillion won, an 8.2% increase. The government will work to secure core military capabilities and build AI-, robotics-, and drone-based manned-unmanned integrated systems, while also raising salaries for junior officers and increasing veterans’ compensation and combat service honor allowances. A new Resource Security Fund of 1.4 trillion won will be established, and oil reserve facilities will be expanded by 20 million barrels. President Lee emphasized, “For the future of the nation and the lives of the people, the government and the National Assembly—both the ruling and opposition parties—must join forces,” adding, “The key lies in execution and speed.” He then called on the National Assembly to cooperate so that next year’s budget proposal and accompanying bills can be finalized by the statutory deadline of December 2.
◇ Lee: “Competition is good, but it must not turn into a war… Investment is needed for the future”

Prior to his policy address to the National Assembly on the 2nd, President Lee Jae-myung held a preliminary discussion with National Assembly Speaker Cho Jung-sik and others. He stated, “This budget is, in fact, surprisingly large in scale,” but added, “Since the managed fiscal balance is around -0.1%, we will be able to manage the national finances with almost no new government bond issuance.”
Regarding the People Power Party’s argument that the increased fiscal spending should be used to repay debt, President Lee said, “There is some validity to that argument,” but added, “If we look to the future and determine that it is useful for laying the foundation for sustainable growth, I believe it is right to invest in the future.” He continued, “Competition is good, but I believe it should not turn into a war,” adding, “I think it would be better if we demonstrated rational competition for the sake of a better world.”
Chairman Cho stated, “The National Assembly will thoroughly review this budget bill to ensure it is used effectively for the benefit of the people’s lives and the future of the Republic of Korea,” and added, “The ruling and opposition parties will do their utmost together to ensure it is processed within the statutory period stipulated by the Constitution.” He further noted, “When it comes to people’s livelihoods and the national interest, there can be no division between the ruling and opposition parties.”