Seoul: South Korea's finance ministry announced on Tuesday that the government has earmarked 39.7 trillion won (US$29 billion) for the ministry under the 2027 budget proposal. The focus of this budget is on fostering future growth engines and expanding export financing.
According to Yonhap News Agency, the Ministry of Finance and Economy stated that this allocation marks a 15.7 percent increase, or 5.4 trillion won, from the 2026 budget. "The finance ministry will focus on providing capital and export financing to foster future strategic industries and supporting hyper-innovation economy projects through the budget in connection with the second-half economic growth strategy," the ministry added.
As part of the initiative, South Korea will establish a new strategic investment account under Korea Investment Corp. (KIC), the nation's sovereign wealth fund, with an allocation of 500 billion won. The move aligns with a global trend where countries use strategic sovereign wealth funds to build national wealth and strengthen economic security while pursuing proactive industrial policies.
Additionally, South Korea plans to launch a strategic export finance fund to better support exporters engaged in large-scale and long-term projects. In response to intensifying supply chain disruptions due to conflicts in the Middle East, the government will allocate 200 billion won to establish domestic and overseas production bases for key products, up significantly from 10 billion won in 2026.
Furthermore, the nation will expedite artificial intelligence (AI) and digital projects under the Economic Development Cooperation Fund, with $170 million earmarked for establishing an AI institute in Tanzania. Under its hyper-innovation economy initiative, South Korea aims to gain a competitive edge in emerging sectors such as offshore wind power, green hydrogen, and small modular reactors (SMRs), with planned spending of 3.6 trillion won, an increase from 2.7 trillion won the previous year.
The budget proposal is scheduled to be submitted to the National Assembly on Thursday.