The National Growth Fund, launched by the South Korean government to secure future growth engines, has shown sluggish investment progress. Since its inception in December last year, the fund has received approval for 18 trillion won in investments as of the end of September, but only 4.5 trillion won has been executed, resulting in an execution rate of just 25.4%.
According to data received by Han Min-soo, a member of the National Assembly's Political Affairs Committee, from the Korea Development Bank, the approved amount for the National Growth Fund, excluding the National Participation Growth Fund and K-Content Fund, stands at 18.03 trillion won. Of this, the actual amount executed is 4.57 trillion won, reflecting an execution rate of only 25.4%.
Specifically, the Advanced Strategic Industry Fund approved 8.56 trillion won, but as of the end of September, only 1.81 trillion won had been executed, resulting in an execution rate of 21.1%. During the same period, private sector support amounted to 9.46 trillion won, with 2.77 trillion won executed, yielding an execution rate of 29.3%. Although the execution rate increased by 4.1 percentage points from the end of August (21.3%), concerns remain about the slow pace of execution relative to the approved amounts.
The distribution of investment funds has also deviated from the original intent. The National Growth Fund aims to prioritize funding for advanced strategic industries, research and development (R&D), venture scale-ups, and regional growth. However, as of the end of September, large corporations accounted for 10.93 trillion won, or 60.6%, of the total approved amount of 18.03 trillion won. In contrast, mid-sized companies received 4.96 trillion won (27.5%), while small businesses were allocated 2.14 trillion won (11.9%). Regionally, 10 trillion won was approved for the Seoul metropolitan area, making up 55.4% of the total. The Honam region followed with 5.2 trillion won (28.7%), while the Yeongnam region received 1.4 trillion won (7.9%), the Chungcheong region 1.4 trillion won (7.5%), and Gangwon and Jeju 1 billion won (0.4%).
A financial industry official stated, "It is still early to evaluate since the fund has only recently been established, but there may be concerns about the excessive concentration on large corporations and the Seoul metropolitan area. The relatively low support for regions like Gangwon, Jeju, and Chungcheong is disappointing."
Han Min-soo emphasized, "The execution rate of the 18 trillion won approved by the National Growth Fund is only a quarter, and the funds are disproportionately directed toward large corporations and the Seoul metropolitan area, undermining the original purpose of the fund. The financial authorities and the Korea Development Bank must immediately improve the distribution criteria to ensure that funds flow evenly to small businesses and non-metropolitan areas."
* This article has been translated by AI.
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