The South Korean government has proposed a 728 trillion won ($525 billion) budget for 2026, marking an 8.1% increase from this year. The plan reflects a major push toward research and development (R&D) and artificial intelligence (AI) to drive long-term economic growth.
The budget proposal, the first under President Lee Jae Myung, emphasizes strategic fiscal expansion to counter challenges such as weakening exports, an aging workforce, and sluggish corporate investment. Finance Minister Koo Yoon-cheol said spending will be restructured to prioritize performance-based outcomes, with 27 trillion won trimmed from low-performing projects to secure funds for innovation.
Key allocations include 35.3 trillion won for R&D, a 19.3% increase from last year, and 10.1 trillion won for AI development—up from 3.3 trillion won in 2025. The AI budget includes purchasing 150,000 GPUs, talent training, and support for technology-driven industries such as robotics, shipbuilding, and automotive manufacturing.
Over the next five years, the government aims to invest 100 trillion won in AI through various funds, positioning South Korea as one of the world’s top three AI powers. Additional allocations include 1 trillion won in public finance support for small and venture firms and 6 trillion won for regional innovation hubs.
Officials described the 2026 proposal as both an immediate economic measure and a long-term roadmap for building a “super innovation economy” anchored in advanced technologies.
