Defense Budget Enters the "70 Trillion Won Era" ... 100 Billion Won to Be Invested in Nuclear-Powered Submarines [2027 Budget Plan]

The government will establish a 1.4 trillion won Resource Security Fund in next year's budget proposal. The move comes as the recent war in the Middle East has intensified global supply chain risks involving crude oil and naphtha, increasing the need to secure and manage key resources from a long-term perspective. Accordingly, the government will expand both crude oil stockpiles and storage bases while significantly boosting investment in recycling and recovery for critical minerals.
The government approved the "2027 budget plan" at a meeting of the State Council of South Korea on the 1st.
To move away from an energy and resource supply structure focused on short-term efficiency and build a long-term foundation for resource security, the government created the Resource Security Fund. The fund will support the securing of critical minerals, the expansion of oil and mineral stockpiles, and the diversification of import sources. It will also sharply increase funding for key supply chain projects. Investment in the oil stockpiling project will rise from 55.3 billion won this year to 328.7 billion won next year, while the supply chain stabilization program budget will increase from 10 billion won to 200 billion won over the same period.
In detail, the oil stockpiling project will receive 56.8 billion won to expand new storage facilities with a capacity of 20 million barrels, improving the ability to respond to supply disruptions. Another 200 billion won will be used to secure an additional 2 million barrels of crude oil reserves.
The government will also newly allocate 46 billion won for investment support in refining facility upgrades and new process technology research and development projects aimed at reducing dependence on the Middle East and diversifying import sources.
A total of 93.4 billion won will be invested in securing critical minerals such as rare-earth elements, which are essential raw materials for advanced industries. Another 10.6 billion won has been set aside for facilities that extract resources from waste and byproducts through recycling and recovery. The government plans to build a domestic resource circulation system for critical materials that rely heavily on overseas supply, raise the recycling and recovery rate to 20% by 2030, and respond proactively to global supply chain risks.
For the first time, the defense budget has surpassed 70 trillion won. The government set next year’s defense budget at 73.2777 trillion won, up 5.5737 trillion won from this year. The increase of 8.2% marks the largest rise since 2008, based on the finalized budget.
Budget allocations will focus on strengthening self-reliant defense capabilities and improving the treatment of junior officers and noncommissioned officers. First, 100 billion won will be newly invested to introduce a nuclear-powered submarine. The mass production budget for the KAI KF-21 Boramae will also rise from 1.4 trillion won to 3.3 trillion won next year.
As a key part of the "selective volunteer military system" set to begin next year, the government will expand recruitment of technology-focused noncommissioned officers and raise the total monthly pay for junior officers to around 3 million won. With the incentive payment for short-term service noncommissioned officers increasing from 10 million won per person to 12 million won, the related budget will also grow from 53.2 billion won to 115.2 billion won next year.
[email protected] Choi Yong-joon Reporter