Key facts
- South Korea's government proposed a record 820.9 trillion won budget for 2027.
- The 2027 budget represents a 12.8% increase compared to the 2026 budget.
- Key focus areas for the budget include the low birthrate, regional decline, and AI growth.
- The unification ministry seeks over 1.25 trillion won, with 1.11 trillion won designated for the inter-Korean cooperation fund.
- A portion of the unification ministry's budget is earmarked for the Gyeongwon Railway project, intended to connect Seoul and Wonsan.
South Korea's government has proposed a record budget of 820.9 trillion won for 2027, marking a significant 12.8% increase from the previous year. The proposed budget aims to address key national priorities including the country's low birthrate, regional decline, and the growth of artificial intelligence.
The labor ministry has requested over 38 trillion won for its 2027 budget, with a focus on initiatives to boost youth employment and enhance workplace safety.
Separately, the unification ministry is seeking more than 1.25 trillion won for its 2027 budget. A substantial portion, 1.11 trillion won, is earmarked for the inter-Korean cooperation fund. Notably, the ministry plans to allocate approximately 24.7 billion won towards reviving the Gyeongwon Railway project, which would connect Seoul to Wonsan in North Korea. The South Korean section of this railway is targeted for completion by 2029.
Reflecting a policy shift, the unification ministry's budget prioritizes youth education on "peaceful coexistence," with plans to build a dedicated workforce of up to 10,000 people, having already hired around 4,000. Funding for humanitarian aid, including infant care and healthcare, is set to be reduced by 15% due to underperforming programs and the suspension of inter-Korean exchanges. However, the ministry emphasized Seoul's commitment to inter-Korean cooperation, noting that increased economic cooperation loans will keep the overall fund level unchanged.
President Lee Jae Myung has consistently advocated for improved ties with Pyongyang, and Unification Minister Chung Dong-young has expressed intentions to revive suspended joint economic projects.