Report published September 1, 2026
South Korea 2027 Budget Analysis: Fiscal Surplus Turnaround and KTB Issuance Outlook
Source and citation context
- Issuer
- Goldman Sachs
- Report date
- September 1, 2026
- Analysis as of
- Not stated in source
Authors / editors: Irene Choi (Author), Goohoon Kwon, CFA (Author)
Finvaulta summarizes Goldman Sachs's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
South Korea's Ministry of Planning and Budget proposed a 2027 budget that swings the consolidated fiscal balance into a surplus of 1.9% of GDP, driven by a 49.8% surge in tax revenues. However, KTB net issuance will only decline moderately to KRW96.3trn as excess revenues are allocated into a new Future Response Fund.
Key Takeaways
- 1.The 2027 budget projects the consolidated budget balance to swing to a surplus of KRW59.9trn (1.9% of GDP) from a 1.9% deficit in 2026, marking the first surplus since 2018.
- 2.Strong expenditure growth of 12.8% to KRW821trn is expected to add a fiscal impulse of 1.0pp to headline GDP growth, presenting roughly 0.3pp potential upside to Goldman Sachs' 2027 growth forecast.
- 3.Excess tax revenues of KRW162.3trn will fund the new Future Response Fund (FRF), reserving KRW104.4trn for future use and resulting in only a moderate decline in net KTB issuance by KRW13.1trn.
Table of Contents
- Bottom line:
- Main points:
- Disclosure Appendix
Report data
Exhibit 3: Future Response Fund is to be funded by excess tax revenues, with spending of KRW45.4trn in 2027 (Breakdown of changes to the consolidated budget)
| Metric | Estimate | Context |
|---|---|---|
| Consolidated Budget Balance | 59.9 KRW trn | Projected surplus compared to a 1.9% deficit in 2026 |
| Managed Fiscal Deficit to GDP | 0.1% | Narrowing from 3.8% of GDP in 2026 to 0.1% in 2027 |
| Government Expenditure | 821.0 KRW trn | Total government expenditure growing at a historic pace |
| Government Revenue | 880.8 KRW trn | Total projected government revenue for 2027 |
| KTB Net Issuance | 96.3 KRW trn | Net issuance of Korea Treasury Bonds |
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Authors / Editors
Reported Data Context
- Consolidated Budget Balance: 59.9 KRW trn (2027) · Source: Korea Ministry of Planning and Budget (MPB)
- Managed Fiscal Deficit to GDP: 0.1 % (2027) · Source: Korea Ministry of Planning and Budget (MPB)
- Government Expenditure: 821.0 KRW trn (2027) · Source: Korea Ministry of Planning and Budget (MPB)
- Government Revenue: 880.8 KRW trn (2027) · Source: Korea Ministry of Planning and Budget (MPB)
- KTB Net Issuance: 96.3 KRW trn (2027) · Source: Korea Ministry of Planning and Budget (MPB)
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