State spending to top $729 billion by 2030 amid fiscal expansion

Korea's government spending is set to surpass 1 quadrillion won, equivalent to $729 billion, for the first time by 2030. This surge in spending is primarily due to the aggressive fiscal expansion under the Lee Jae Myung administration, according to figures released by the Ministry of Planning and Budget on Tuesday. The 2026-2030 fiscal plan anticipates government expenditure will increase from 820.9 trillion won in 2026 to a record 957.4 trillion won in 2029, ultimately reaching 1.005 quadrillion won in 2030.

The main driver of this spending expansion is the sharp rise in tax revenues, fueled by strong corporate earnings in the semiconductor sector. National tax revenues are expected to increase by 49.8 percent to 584.4 trillion won next year, a significant jump of 194.2 trillion won from the current year. Over the five-year period leading up to 2030, tax revenues are projected to grow at an average annual rate of 13.4 percent, reaching 644.8 trillion won by the end of the decade.

Despite the record spending, the government remains confident in keeping its fiscal deficit under control. This is attributed to the steady nominal economic growth, with projections indicating that the managed fiscal deficit will remain below 3 percent of nominal gross domestic product.