Government establishes a 162.3 trillion won Future Response Fund

The government has decided to create a new Future Response Fund worth 162.3 trillion won starting next year. This fund has been included in the 2027 budget proposal, and it is a megascale fiscal device that accounts for a large share of the total budget. The government’s plan is to set aside increased tax revenue from the semiconductor boom and other factors, invest it in youth, local regions, education, and growth engines, and also use it as a fiscal buffer to prepare for economic fluctuations or declining tax revenue. Part of the funds will be used to reduce the scale of bond issuance, while the rest will be accumulated to secure future fiscal capacity. However, concerns have also been raised that the fund’s management scope is broad and that the government can change some plans without National Assembly review, which could weaken fiscal control. Experts pointed out that limits and an end date should be made clear so that the fund is not effectively operated like a separate general account.