Gist of proposed state budget for 2027
SEOUL/SEJONG, Sept. 1 (Yonhap) -- The following is the gist of the 820.9 trillio...
The South Korean government has proposed a substantial 820.9 trillion won (US$595 billion) state budget for 2027, with the aim of boosting fiscal spending by 12.8 percent year-on-year. The budget allocation is spread across various sectors, with notable increases in healthcare, education, and defense spending.
The education sector is set to receive a 10.8 percent increase, bringing its allocation to 110.7 trillion won. A significant 20.4 percent rise in funding is earmarked for culture, sports, and tourism, which will see its budget rise to 11.6 trillion won. Environmental protection will also see a 5.2 percent increase, amounting to 14.6 trillion won.
Research and development will experience an 11.2 percent boost, with the industrial sectors, small and medium-sized enterprises, and energy receiving a 29.7 percent increase, totaling 39.5 trillion won. Social overhead capital is set for a modest 4 percent hike, while agriculture, fisheries, and food will see a 9.5 percent increase to 28.9 trillion won.
The budget also includes a 8.2 percent increase in defense spending, bringing it to 73.3 trillion won. Diplomacy and inter-Korean affairs are allocated 7.1 trillion won, a 1.1 percent increase. Public safety is slated for a 5.3 percent rise, reaching 28.8 trillion won.
Administrative spending, which has seen a substantial 22.8 percent increase, totals 149 trillion won. The budget also proposes the establishment of a Future Fund, which will be funded by windfall tax revenue of 162.3 trillion won.
The government anticipates total revenue of 880.8 trillion won for 2027, a 30.4 percent increase from the previous year. This revenue is primarily composed of 584.4 trillion won in national taxes, which are expected to rise by 49.8 percent compared to 2026. Despite the increased spending, fiscal health is projected to improve, with the government aiming for a deficit of 3.1 trillion won in 2027, a significant improvement from the 2026 shortfall of 107.8 trillion won.
The national debt is expected to reach 1,519.8 trillion won in 2027, up from 1,413.8 trillion won in 2026. However, the debt-to-GDP ratio is anticipated to decrease from 51.6 percent in 2026 to 48.3 percent in 2027, as the national revenue is projected to grow at an average annual rate of 9.9 percent over the 2026-30 fiscal management plan.
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