The South Korean government plans to draw up a record national budget exceeding 800 trillion won ($535 billion) for 2027.
Minister of Planning and Budget Park Hong-keun announced the government’s fiscal management plan on Monday during a National Fiscal Strategy Meeting chaired by President Lee Jae-myung at the Blue House State Guest House.
“Next year’s national tax revenue is expected to be far above the government’s previous projection of 412 trillion won, reaching a record-high level of more than 500 trillion won,” Park said.
“Accordingly, we plan to draw up next year’s total spending at around 800 trillion won, up 10 percent from this year.”
Semiconductor boom drives revenue surge
Lee noted that “an unprecedented amount of additional tax revenue is expected to be generated, driven by the semiconductor boom sparked by the artificial intelligence (AI) revolution.”
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It has expanded spending to an unprecedented level as corporate tax revenue is projected to surge significantly. Strong exports from major domestic corporations, including the semiconductor industry which enters a supercycle, are fueling the increase.
“We will use these extra funds as a source of strategic investment to prepare for the future,” Lee said.
The projected revenue jump is notable.
The government’s previous estimate for 2027 national tax revenue was 412 trillion won.
The new projection of more than 500 trillion won represents an increase of roughly 88 trillion won — a gap large enough to fund that spending hike while still leaving room for new investment programs.
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Future Response Fund targets four priorities
“The extra revenue is a valuable financial resource that must be used during the golden window when the global AI race for supremacy will be decided,” Lee said.
“We will establish a Future Response Fund to focus investment on four key areas that will determine the country’s future — future growth engines, younger generations, regional development, and education. Through these investments, we will enhance our economy’s growth potential and ensure that the benefits are shared with all citizens,” he emphasized.
It has recently begun using the term “additional tax revenue” instead of “excess tax revenue.”
The surplus collected above the long-term trend will be accumulated in the Future Response Fund and invested in the four priority areas.
