South Korea Eyes 8.1% Budget Increase to Aid Growth Amid Tariffs

South Korea’s new liberal government plans a hefty expansion of its annual budget to revive an economy under pressure from US tariffs, rising welfare costs and an aging population with one of the world’s lowest birth rates.

President Lee Jae Myung’s administration proposed a 728 trillion won ($522 billion) budget for 2026 including ramped-up defense spending, for an 8.1% overall increase from this year’s budget, excluding supplementary outlays, the finance ministry said in a statement Friday. That’s more than triple the 2.5% expansion of the budget in 2025.