(URGENT) Gov't to propose record 820.9 tln-won budget for 2027: budget minister

The South Korean government has proposed a 2027 budget of 821 trillion won, marking a 12.8% increase from this year's budget of 728 trillion won and the highest growth rate on record. The budget, announced by the Ministry of Planning and Budget at a Cabinet meeting, aims to address structural challenges such as the low birthrate and regional decline, while fostering growth in artificial intelligence (AI).

Budget Minister Park Hong-geun emphasized the budget as a fiscal investment plan, showcasing tangible results on policy objectives.

The proposal highlights the tax revenue generated by the semiconductor boom, which will be strategically invested to spur innovation across South Korea's economic and social systems. A portion of this revenue, known as the Future Fund, will total 162.3 trillion won in 2027 and be used for four major pillars: youth, growth engines, regional economies, and education.

The government also plans to restructure approximately 108 trillion won in spending by eliminating nonessential projects and redirecting funds to areas of greatest need.

AI remains a key focus, with a 2027 budget allocation of 21.3 trillion won, nearly double the current year's allocation of 10.8 trillion won. This investment will support three megaprojects involving semiconductors, physical AI, and AI data centers. Additionally, the government plans to bolster other growth engines, including nuclear fusion, small modular reactors (SMRs), quantum technology, aerospace, and advanced biotechnology, with 62.8 trillion won.

The budget also allocates funds to support young individuals across various life stages and addresses regional disparities, with a 36.6% increase in spending on these areas.