South Korea is preparing an expansionary 2027 budget expected to exceed 800 trillion won and fall in the 820 trillion won range, channeling stronger semiconductor-related tax revenue into youth programs, artificial intelligence, and three semiconductor and AI mega-projects. The government and Democratic Party of Korea agreed to inject fresh capital into Korea Electric Power Corporation and Korea Water Resources Corporation—effectively KEPCO’s first cash infusion in about 15 years—to secure electricity and water for advanced-industry facilities, without disclosing amounts. KEPCO’s consolidated debt stood near 210.7 trillion won at end-June with a debt-to-equity ratio above 400%, while more than 80 trillion won in grid investment is planned over the next decade-plus. Officials also advanced a Semiconductor Special Account, feasibility-study exemptions for 26 projects including Manufacturing AI Transformation, a roughly 6 trillion won semiconductor-cluster infrastructure program for 2027–2030, and water reallocation from Naju Lake to the southwestern cluster. President Lee Jae-myung urged a shift to productive fiscal strategy; economists cautioned that lasting entitlement-style outlays must be matched by spending discipline.