Seoul: The ruling Democratic Party (DP) and the government emphasized the importance of an active fiscal policy and investment in future industries during a consultative meeting on Tuesday, as they prepare a record-high budget proposal for the year 2027.
According to Yonhap News Agency, DP floor leader Han Byung-do highlighted the necessity of focusing fiscal resources on leading future industries. He urged the government to strategically prioritize budget allocation, particularly in areas that support youth, regional growth, and future industries. This aligns with President Lee Jae Myung's announcement of a projected budget of around 800 trillion won (US$540 billion) for the next year, utilizing additional tax revenue from the booming semiconductor sector to establish a "future response fund" aimed at investing in future industries, youth policies, and regional development.
Rep. Kwon Chil-seung, the DP's chief policymaker, echoed Han's sentiments, advocating for strategic investments in artificial intelligence (AI) to position South Korea as one of the top three AI powerhouses globally. He stressed the active role the 2027 budget proposal should play in supporting the country's growth and transformation, with investments in critical sectors such as bio, culture, defense, and energy.
Budget Minister Park Hong-geun outlined the government's fiscal strategy, focusing on supporting economic growth through active fiscal management to create an "irreplaceable South Korea." The government plans to channel increased tax revenue from the semiconductor boom into strategic investments rather than short-term expenditures through the "future response fund."
The DP and the government identified five key investment areas for the 2027 budget, including advancements in the AI sector and the "three megaprojects" initiative. They also pledged to strengthen future growth engines, enhance youth support, address societal polarization, and improve public safety. As part of these efforts, the government intends to increase funding for aerospace research and development, aiming for a lunar landing by 2030, and to secure 10,000 graphics processing units to develop cutting-edge AI models.
The budget proposal also includes record-high subsidies for electric vehicles, support for nuclear-powered submarine development, and full tuition support for students at regional national universities. The "three megaprojects" initiative, announced in late June, seeks large-scale investments in semiconductors, physical AI, and AI data centers in regional areas.