South Korea has proposed an 821 trillion won ($598.79 billion) national budget for 2027, with major allocations for semiconductors, artificial-intelligence infrastructure and strategic weapons. President Lee Jae Myung said on September 1 that an interest rate increase was unavoidable, warning that higher borrowing costs could weaken potential growth and hurt socially disadvantaged groups. He urged Parliament to offer broad suggestions to strengthen the budget, expand future economic resources and improve industrial capabilities. The proposal includes 2.6 trillion won in special semiconductor funding and 3.4 trillion won for a nuclear-powered submarine program and other strategic weapons. The semiconductor allocation is intended to channel temporary chip-related tax windfalls into longer-term infrastructure, including manufacturing, AI data centers and government-designated physical AI projects. The budget still requires parliamentary approval.