South Korea Proposes 8.2% Increase in 2027 Defense Budget to Boost Self-Reliant Capabilities

(ATTN: ADDS details from ministry briefing throughout)

By Kim Seung-yeon

SEOUL, Sept. 1 (Yonhap) -- The defense ministry said Tuesday it has proposed an 8.2 percent increase in the 2027 budget, seeking to accelerate its push for the transfer of wartime operational control (OPCON) from the United States, and modernizing forces and capabilities amid a demographic cliff.

The proposal calls for a budget of 73.27 trillion won (US$53.5 billion), up 5.57 trillion won from 67.7 trillion won in 2026, the ministry said.

The on-year rise of 8.2 percent will mark the largest increase in the defense ministry's spending since 2007, if the budget is approved at the National Assembly.

The proposed defense budget will represent 2.33 percent of next year's gross domestic product (GDP) forecast, slightly up from this year's 2.28 percent.

Seoul seeks to gradually raise its defense spending to 3.5 percent of GDP by 2035, aligning with the Donald Trump administration's demand for its allies to shoulder a greater share of their own defense.

"It is focused on strengthening our military's self-reliant defense capabilities and pivoting from manpower-heavy forces to a technology-centered military, in response to a rapidly changing security environment and a shrinking pool of conscripts," the ministry said in a release.

In particular, the proposed budget aims to help secure key military capabilities required for the OPCON transition from Washington, an initiative that the Lee Jae Myung administration seeks to achieve before its five-year term ends in 2030 or at an earlier date.

The ministry plans to spend 21.3 trillion won to secure key capabilities to meet the conditions for the OPCON transfer, up from 18.6 trillion won set aside for 2026.

The proposed budget will also support efforts to acquire nuclear-powered attack submarines, as Seoul has initiated talks with Washington to build the key warships under a bilateral trade and security agreement.

About 100 billion won has been allocated for the Jang Bogo N nuclear-powered submarine program, a sharp increase from an initial proposal of 20 billion won.

The draft budget for the KF-21 homegrown fighter jet development has significantly increased from 1.4 trillion won to 3.3 trillion won, to facilitate its mass production amid a push to expand the export of South Korean defense products.

The KF-21 fighter jet program, a centerpiece of South Korea's air defense strategy, plans to deliver 40 air-to-air capable jets under Block-I by 2028, followed by 80 Block II units equipped with domestically built air-to-ground missiles by 2032.

The military plans to upgrade its air-to-ground radio systems and build a new wartime intelligence network for the South Korea-U.S. Combined Forces Command (CFC) in an effort to enhance the Korean military's ability to lead the CFC after the OPCON transition.

To bolster its defense against North Korean nuclear and missile threats, the military will expedite the deployment of medium-altitude unmanned aerial vehicles (MUAV) and long-range surface-to-air missile (L-SAM) systems by roughly one year, targeting between late 2027 and 2028.

As part of efforts to respond to a decline in the pool of conscripts, the ministry plans to use the proposed budget for the transition of forces into an artificial intelligence (AI)- and unmanned system-driven structure, with a focus on upgrading drone and anti-drone capabilities.

The sectoral budget for forces operations has been set at 50 trillion won, a 5.9 percent increase from this year, with 22.7 trillion won allocated for defense capability enhancement, marking a 13.8 percent on-year increase.

The budget for the military manpower administration sector has been set at 524.9 billion won, a 1.4 percent increase from 2026, according to the ministry.