South Korea will draw up record budget spending of more than 800 trillion won ($530.97bn) for fiscal 2027, supported by stronger tax revenues from the booming AI chip industry, the government said on Monday.
It is the clearest sign yet that Seoul intends to spend the semiconductor windfall rather than save it, an argument the country has been having since it floated a ‘future response fund’ built on chip tax receipts earlier this month.
Budget Minister Park Hong-keun, speaking at a national fiscal strategy meeting, said the plan would be financed through higher tax receipts and expenditure cuts. The proposal compares with this year’s 727.9 trillion won spending plan, excluding supplementary budgets.
Three “mega-projects”, covering chips, AI data centres and physical AI, will receive top fiscal priority. The government said it would secure the funding capacity through a major restructuring of existing programmes rather than relying solely on the extra tax revenue, which is a more disciplined framing than the numbers alone suggest.
Park said the restructuring would target about 50 trillion won of spending, twice last year’s level, through a review of discretionary and mandatory expenditures and cuts to underperforming programmes. That is the part of the plan that will meet resistance, because every underperforming programme has a constituency.The 💜 of EU techThe latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!
