Korea to increase budget for R&D, birthrate amid belt-tightening stance in 2025

Korea will focus next year's fiscal policy on better promoting next-generation research and development projects, boosting the country's ultra-low birthrate and bolstering necessary medical services, the finance ministry said Tuesday.

They are part of the government's guidelines for the 2025 budget, approved by the Cabinet on the day, which also call for the continued commitment to fiscal soundness, according to the Ministry of Economy and Finance.

The ministry has yet to present the exact figure, but it is expected to draw up around 680 trillion won ($508.1 billion) for next year by raising the yearly budget by about 4.2 percent on-year.

"The government will maintain the stance of fiscal soundness to ensure the fiscal responsibility for future generations, while fully meeting demand for the livelihoods of the people," the ministry said in a release.

In detail, the government seeks to increase the budget for R&D investment in advanced technologies for next-generation industry fields, such as the artificial intelligence, bio and quantum sectors.

Strengthening welfare programs for vulnerable people will also be the focus for next year.

How to cope with demographic changes and seek reform measures for the future will also be the policy priority next year.

The government plans to spend more on supporting child rearing and education, as well as ensuring gender equality, to boost the birthrate, the ministry said.

The country's total fertility rate, which is the average number of expected births from a woman in her lifetime, fell to a record quarterly low of 0.65 in the fourth quarter of 2023.

With a goal to bolster security and social safety, the government vowed to increase investment in medical services, particularly in rural areas and essential medical fields, such as pediatrics and neurosurgery, which have seen a shortage of doctors.

"We will markedly increase investment in innovative R&D projects and strengthen our responses to the low birthrate," a ministry official said.

"Our focus will also be on better supporting young people and achieving a regional economy by creating decent jobs and improving living conditions in non-metropolitan areas," he added.

Government ministries and agencies will use the guidelines to draw up their spending plans by end-May, which will be submitted to the National Assembly by Sept. 2 after consulting with entities and receiving public input.

The Yoon Suk Yeol government has stressed belt-tightening policies to improve national fiscal soundness following years of expansionary fiscal spending in response to the COVID-19 pandemic. (Yonhap)