South Korea plans to introduce its largest-ever national budget in 2027, with government spending set to exceed $580 billion, Finance and Budget Minister Park Hong-keun said on July 13, as the administration prepares to accelerate investment in semiconductors, artificial intelligence and other strategic industries.
Speaking at the government’s National Fiscal Strategy Meeting chaired by President Lee Jae Myung, Park said total expenditures would be set at “more than $580 billion, plus additional funding,” representing an increase of at least 10% from this year’s budget and marking the first time annual government spending has crossed the $580 billion threshold.
Park also projected that tax revenue next year would surpass the government’s earlier forecast of about $300 billion, reaching more than $365 billion, the highest level on record. He called the stronger-than-expected revenue outlook a rare opportunity to strengthen South Korea’s long-term economic competitiveness.
To create additional fiscal capacity, Park said the government would undertake a comprehensive zero-based review of all spending programs. The plan calls for reducing discretionary spending by 15% and mandatory spending by 10%where possible, with the goal of reallocating more than $36 billion to higher-priority initiatives.
The additional spending will be concentrated on three flagship projects: expanding South Korea’s semiconductor industry, building artificial intelligence data centers and advancing physical AI technologies.
Park said the government would speed up land acquisition, permitting and other administrative procedures to support private-sector investment while expanding electricity and water supplies, transportation networks and other infrastructure needed for large-scale industrial projects.
He added that 2026 and 2027 would be a period of intensive national investment, with spending growth expected to moderate gradually beginning in 2028 as major projects move from investment to execution and begin producing measurable results.
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