Next Year’s Budget Set at 728 Trillion Won, an 8.1% Increase Over This Year
Focus on Technology-Driven Innovation and Inclusive Growth
Record Expenditure Restructuring to Secure Financial Resources
President Lee Jae Myung is speaking at the temporary Cabinet meeting held on the 29th at the Yongsan Presidential Office building in Seoul. Photo by Yonhap News
On the 29th, President Lee Jae Myung reviewed and approved next year's budget bill, totaling 728 trillion won, at the Cabinet meeting. In his opening remarks, President Lee identified "innovation in the industrial economy driven by new technologies" and "an export-dependent economy vulnerable to external shocks" as the key challenges facing the Korean economy. He evaluated the 2026 budget as "a priming pump to simultaneously address these two challenges and drive recovery and growth through a major economic transformation."
Presiding over the temporary Cabinet meeting at the Yongsan Presidential Office on the same day, President Lee stated, "Our economy is facing two simultaneous challenges: innovation in the industrial economy led by new technologies, and improving the export-dependent economy that is vulnerable to external shocks." He emphasized that this is a time when an active fiscal role is needed. President Lee explained, "It would be a mistake to leave the field fallow just because we lack enough seeds. Common sense and reason dictate that we should borrow seeds if necessary and prepare for farming."
President Lee also stressed that bipartisan cooperation is essential to build on the achievements of his recent visits to the United States and Japan, which lasted six days and three nights until the 28th. He said, "Diplomacy is ultimately conducted by people, and to protect the national interest, we must win hearts. Based on the warm trust established during this trip, I will strive to safeguard our national interests and further expand cooperation with neighboring countries."
He continued, "To build on the achievements of the trip, bipartisan cooperation is needed. On matters of diplomacy or national interest, I hope there will be no dissenting voices. I will do my best to arrange a meeting with the leadership of both parties as soon as possible to directly explain the outcomes of the trip and discuss ways to cooperate."
Regarding the so-called "Yellow Envelope Act" (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act), which recently passed the National Assembly, President Lee pointed out that the labor sector also needs a spirit of mutual growth. He said, "The true purpose of the Yellow Envelope Act is to promote mutual respect and cooperation between labor and management. I earnestly ask the labor sector to demonstrate a spirit of mutual growth and to join forces as responsible economic actors for the development of the national economy."
He added, "Korea must now meet international standards and levels in all areas. I hope that thorough follow-up measures will be prepared so that the new system can be fully established on the ground."
Next Year's Budget Increases by 8.1% to 728 Trillion Won
President Lee Jae Myung is entering the temporary Cabinet meeting held on the 29th at the Yongsan Presidential Office building in Seoul, receiving a standing ovation from the Cabinet members. Photo by Yonhap News
At the Cabinet meeting, eight general agenda items, including next year's budget bill and the fund management plan, were reviewed and approved. The 2026 budget has been set at approximately 728 trillion won, an increase of 8.1% compared to this year. The goals of next year's budget are: ▲realizing a super-innovative economy driven by technology, ▲building a robust society where everyone can grow, and ▲ensuring national safety and diplomacy/security centered on the national interest.
To secure the necessary resources, a record-high expenditure restructuring of about 27 trillion won was also carried out. This reflects the commitment to implement "performance-oriented" fiscal management by restructuring wasteful and habitual spending. Since taking office, President Lee has repeatedly instructed at Cabinet and staff meetings that "the nation's fiscal capacity is not large," and has directed each ministry to boldly adjust budgets that are habitually allocated, inefficient, or wasteful. He even held meetings specifically to discuss "budget savings."
Next year's general account expenditure is set at 507.4 trillion won, a 7.1% increase from this year's main budget. In terms of revenue, national tax revenue is projected at 378.6 trillion won, non-tax revenue at 18.6 trillion won, and deposits in the Public Capital Management Fund at 109.9 trillion won. The expenditure for 21 special accounts, including the Special Account for Agricultural and Fishing Village Structure Improvement, is set at 117.3 trillion won, a 16.0% increase from this year's main budget.
The fund management plan focuses on investment in areas such as a super-innovative economy led by technology, growth for all, a robust society, national safety, and diplomacy/security centered on the national interest. The total fund revenue is projected at 997.1 trillion won, consisting of 261.8 trillion won in self-generated income, 209.6 trillion won in internal government revenue, 265.8 trillion won in borrowings, and 259.8 trillion won in recovered surplus funds.
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