SEOUL, July 13 (Reuters) – South Korea said on Monday it would draw up record budget spending of more than 800 trillion won ($530.97 billion) for fiscal 2027, supported by stronger tax revenues from the booming AI chip industry.
Budget Minister Park Hong-keun, speaking at a national fiscal strategy meeting, said the spending plan would be financed through higher tax receipts and expenditure cuts. The proposed budget compares with this year’s 727.9 trillion won spending plan, excluding supplementary budgets.
The government said three “mega-projects” — investments in chips, AI data centres and physical AI — would receive top fiscal priority, adding that it would secure funding capacity through a major restructuring of existing spending programmes, rather than relying solely on increased tax revenue.
President Lee Jae Myung said the government would use all available means to ensure that corporate investments proceed on schedule.
“Additional tax revenue coming at this time is a precious resource to be used at a golden time when global AI dominance will be determined,” Lee said.
Budget Minister Park said the government would seek to restructure about 50 trillion won in spending, twice the level of the previous year, through a review of discretionary and mandatory expenditures and cuts to underperforming programmes.
South Korea plans to launch a Future Response Fund as a strategic investment platform, setting aside tax revenue that exceeds long-term trends and investing it in four areas: youth, growth engines, regions and talent, the government said.
($1 = 1,506.6900 won)
(Reporting by Joyce LeeEditing by Shri Navaratnam)