Key facts
- South Korea proposed a record 820.9 trillion won ($595 billion) budget for 2027.
- The budget represents a 12.8% increase in fiscal spending compared to 2026.
- Key focus areas include low birth rates, regional decline, AI growth, youth employment, and workplace safety.
- Total revenue is projected to reach 880.8 trillion won, a 30.4% increase from 2026.
- The projected deficit for 2027 is 3.1 trillion won, a significant reduction from 2026.
- National debt is expected to reach 1,519.8 trillion won, or 48.3% of GDP, in 2027.
South Korea's government has proposed a record 820.9 trillion won ($595 billion) state budget for 2027, marking a 12.8% increase in fiscal spending compared to the previous year. The budget prioritizes areas such as addressing the low birth rate, regional decline, and fostering AI growth.
Key spending allocations include 289 trillion won for health, welfare, and labor, an increase of 9.3%; 110.7 trillion won for education, up 10.8%; and 73.3 trillion won for defense, up 8.2%. Other significant allocations are designated for culture, sports, tourism, the environment, research and development, industrial sectors, small and medium-sized enterprises, energy, social overhead capital, agriculture, fisheries, food, and public safety.
The government anticipates total revenue of 880.8 trillion won for 2027, a substantial 30.4% increase from 2026, driven by a projected 49.8% rise in total national taxes. This revenue growth is expected to help manage the fiscal balance, with a projected deficit of 3.1 trillion won for 2027, a significant improvement from the 107.8 trillion won shortfall in 2026. The national debt is forecast to reach 1,519.8 trillion won in 2027, representing 48.3% of GDP, a decrease from 51.6% in 2026.
Under its 2026-30 fiscal management plan, the government aims for an average annual increase of 8.4% in government spending and 9.9% in government revenue. Specific ministry requests include over 38 trillion won for the labor ministry to focus on youth employment and workplace safety, over 1.25 trillion won for the unification ministry to revive projects like the Gyeongwon Railway, and over 2 trillion won for the gender equality ministry, including support for newlyweds.