South Korean President Lee Jae Myung Calls for Expansionary Fiscal Policy

President Lee Jae Myung told his cabinet that South Korea should pursue a proactive, expansionary fiscal stance in the second half of the year and in the 2027 budget. He argued that bold public investment and measures such as consumption‑coupon distribution will revive domestic demand and improve livelihoods, and warned against “populist austerity” that he said would stifle the economy.

Lee cited the country's sound debt profile – a real debt‑to‑GDP ratio of around 10%, far below the G20 average – and pointed to an anticipated surge in tax revenue from a semiconductor super‑cycle. He said that higher growth and a larger GDP denominator would further lower the debt ratio, creating a virtuous cycle of investment, productivity and fiscal health.