South Korea to create 162.3 trillion-won Future Response Fund next year

South Korea plans to create a 162.3 trillion-won Future Response Fund in next year’s budget, using additional revenue generated during a semiconductor boom to finance investment in advanced industries and younger people.

Planning and Budget Minister Park Hong-keun announced the figure at a cabinet meeting at the Blue House. The Planning and Budget Ministry had announced plans for the fund on Aug. 21, but the minister’s statement provided the first specific amount.

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The government will establish the Future Response Fund in the 2027 budget.

Park said the fund would draw on excess tax revenue, additional tax revenue, the world surplus and part of the returns from fund management. He said the government would invest 45.4 trillion won in four areas: youth, growth engines, regional development, and education and talent.

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The Future Response Fund is a strategic investment platform for using the greatly increased tax revenue for productive spending and a fiscal stabilization mechanism that strengthens fiscal capacity.

The minister described the fund as a strategic investment platform for directing sharply increased tax revenue toward productive spending. He also called it a fiscal stabilization mechanism intended to strengthen the government’s financial capacity.

Park said the 2027 budget would pursue what he called bold investment on an unprecedented scale. He said the government wanted public finances to support growth, while economic growth would in turn strengthen the fiscal base, and that the benefits of growth should reach all citizens.

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We will establish a growth-led virtuous cycle in which fiscal policy serves as a catalyst for growth and economic growth becomes the foundation of fiscal policy.