The spending plan marks a sharp break from the austerity policies of Lee’s predecessor, Yoon Suk Yeol, who kept budget growth near 2 to 3 percent. Instead, the new administration is seeking to jolt Asia’s fourth-largest economy with large-scale investments in artificial intelligence, research and development, and social programs.
“The administration faced the critical task of breathing life into a sluggish economy and frozen livelihoods immediately upon taking office,” Deputy Prime Minister and Finance Minister Koo Yoon-cheol said Friday.
The budget earmarks a record 35.3 trillion won for research and development, a nearly 20 percent jump from this year, while tripling AI spending to 10.1 trillion won.
A centerpiece of the plan is a 2.1 trillion won allocation for high-performance graphics processors to build what the Lee administration calls “sovereign AI” — though the number of planned units has been scaled back from 50,000 to 15,000.
Defense spending will climb by 5 trillion won to 66.3 trillion won. The funds will support stealth fighter programs and AI-enabled weapons systems, including a 113.2 billion won investment in bomb-detection and disposal robots.
Social welfare will also expand substantially. Outlays are set at 269.1 trillion won, up 20 trillion from this year, with increases in basic livelihood allowances for households and targeted support for single-person families.
The government also plans to bolster regional higher education, doubling funding for local universities.
A pilot of Lee’s “basic society” platform — providing 150,000 won monthly stipends to residents in depopulating rural areas — will begin next year at a cost of 170.3 billion won.
The expansionary budget carries a heavy fiscal burden.
Tax revenues are projected at 674.2 trillion won, leaving a deficit of about 54 trillion won. National debt will rise to 1,415 trillion won, pushing the debt-to-GDP ratio above 50 percent for the first time.
The fiscal deficit will widen to 4 percent of GDP, surpassing the government’s self-imposed 3 percent ceiling. Officials have pledged to stabilize debt in the “high-50 percent range” by 2029.
The budget bill will be submitted to the National Assembly on Sept. 3, where it is expected to face heated debate before a final vote in December.
reporter
Kim Dong-young
davekim0807@ajupress.com
Copyright ⓒ Aju Press All rights reserved.
View more comments