South Korea to boost budget spending in bid to spur AI-led growth


FILE PHOTO: South Korean President Lee Jae Myung speaks during a South Korea-U.S. business roundtable at The Willard Hotel in Washington, D.C., U.S., August 25, 2025. REUTERS/Annabelle Gordon/ File Photo

SEOUL (Reuters) -South Korea's government plans to raise budget spending for next year by the steepest pace in four years as the country's new president seeks to spur economic growth through a policy of boosting investment in artificial intelligence.

In its annual spending plan released on Friday, the finance ministry set total government expenditure for 2026 at 728.0 trillion won ($524.44 billion). That is up 8.1% from 2025, outstripping the 2.5% increase this year and marking the biggest jump since 2022, excluding the two supplementary budgets introduced so far this year.

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