South Korean President Lee Jae-myung announced the largest fiscal budget in the country's history on Monday, pledging to "boldly invest in artificial intelligence and industries that will be the engines of future economic growth."

Li Zaiming stated on Monday that fiscal expenditures in 2027 will increase by 12.8% to reach 820.9 trillion Korean won, equivalent to 610.14 billion US dollars. Of this amount, the budget allocated for semiconductors, physical AI, and AI data centers amounts to 21.3 trillion Korean won, which is nearly twice the scale of 2026.

There is also a special fund of 4.7 trillion Korean won allocated for the development of the sovereign AI large model, and Lee Jae-myeong stated that this model aims to achieve "the highest performance in the world."

The South Korean government also plans to make significant investments in talent development: it will train 2,000 professionals to lead semiconductor design and the local semiconductor industry; at the same time, it will expand AI education to include current students, job seekers, and employed workers.

South Korean universities have now established "order-based cooperative departments," where students enroll in degree programs tailored for specific companies. Before graduation, they gain access to job opportunities at companies such as Samsung Electronics and SK Hynix. These companies are involved in curriculum design, provide financial support, and recruit qualified graduates.

The International Monetary Fund ( IMF ) predicts that South Korea's GDP growth rate will reach 3.3% in 2026, the highest level since the rebound from the pandemic in 2021. It is against this backdrop that this record-breaking spending plan has been introduced.

Li Zaiming stated that this expansion of fiscal spending will hardly increase the government's net debt; the newly issued national debt will be used to replace and repay existing old debts.

The budget also increases expenditures on national defense and youth social security. The national defense budget has risen by 8.2%, reaching 73.3 trillion Korean won. Lee Jae-myeong stated, "We will rely on artificial intelligence, robots, and drones to build a combat system that combines human and unmanned forces, and quickly create a strong and elite military force."

AI The wave drives global demand for computing power, and semiconductor exports have become a major driver of high economic growth in South Korea.

Data released by the South Korean customs on Sunday showed that in October, South Korea's exports soared by 93.7% year-on-year, reaching a record high of $115.3 billion. In the first ten months of 2026, the cumulative export volume reached $930 billion, breaking through the $900 billion mark for the first time. In October, South Korea had a trade surplus of $42.5 billion; imports amounted to $72.8 billion, a year-on-year increase of 36%.

Lee Jae-myeong stated that, thanks to the outstanding performance of core industries such as semiconductors, South Korea is now within reach of achieving its annual export target of one trillion US dollars.