South Korea's Bold Budget Strategy: Boosting AI Industry

South Korea plans a record budget exceeding 800 trillion won for 2027, driven by the AI chip industry's tax revenue boost. Prioritizing AI mega-projects, the government aims for fiscal prudence by restructuring existing budget programs rather than increasing taxes. A Future Response Fund will support strategic investments.

South Korea announced an unprecedented budget plan on Monday, projecting expenditures of over 800 trillion won by fiscal 2027. The ambitious plan is underpinned by higher tax revenues from the burgeoning AI chip sector.

Budget Minister Park Hong-keun highlighted the plan's focus on fiscal restraint, emphasizing the need to fund three major initiatives, including AI data centers and chips, without solely increasing taxes.

Additionally, President Lee Jae Myung underscored the importance of leveraging additional tax revenues for timely strategic investments, aiming to bolster national AI competitiveness on the global stage.