South Korea Launches Record 2026 Budget for Tech and Defense Growth

South Korea unveiled a record KRW 728 trillion budget plan for 2026, marking an 8.1% increase from this year, more than triple the pace of 2025’s rise. The expansion, aimed at reviving an economy strained by U.S. tariffs, rising welfare costs, and demographic pressures, will be financed partly through a record KRW 232 trillion bond issuance, the finance ministry noted. President Lee Jae Myung’s government said the spending will drive an “economic transformation,” channeling support into AI, semiconductors, shipbuilding, and K-culture, while fostering small businesses and regional growth. Defense outlays will climb 8.3% to KRW 66.3 trillion, funding advanced weapons, drones, and responses to North Korean threats. While President Trump has pressed U.S. allies to raise defense spending, officials said talks with Washington are ongoing, noting the increase would bring defense spending to about 2.4% of GDP.