Entering its second year, the Lee Jae-myung government set a ₩728 trillion 2026 budget and declared this the 'first year of AI transformation,' using expansionary spending to both stimulate growth and seize future industries.

Where the money goes

About ₩10.1tn targets a leap to top-three AI status, ₩2.6tn spreads AI across industry, daily life and the public sector, and ₩7.5tn funds talent and infrastructure.

With the ruling Democratic Party holding a parliamentary majority, the government can legislate relatively smoothly.

The debate: expansion vs. fiscal soundness

Expansion is justified as stimulus and future-industry positioning. But with a weak won and foreign outflows, concern over fiscal soundness and debt is rising.

The opposition questions the pace and scale of spending; the government counters that now is the time to invest. Balancing FX stability with fiscal management will test year two.

For our readers

Rising demand in AI and digital fields may favor bilingual, skilled members of Korea's Chinese community. We present the policy and its debate even-handedly, with follow-ups on jobs and training.

The June 3 local-election results may shape governing momentum and the legislative environment, tied to how quickly the budget is executed.