Moody’s assessed South Korea’s decision to allocate 12.5 trillion Korean won from its 162.3 trillion-won Future Response Fund to reduce new bond issuance as favorable for national credit, saying it indicates the government will not spend all additional semiconductor-related tax revenue. The agency viewed the 820.9 trillion-won 2027 budget as balancing fiscal discipline with investment in youth, artificial intelligence, growth engines, regional development and education. However, government discussions indicate the fund may operate for about four to five years rather than indefinitely, with semiconductor-linked revenue making inflows after 2027 uncertain and potentially shifting continuing programs to the general account. The government forecasts a 59.9 trillion-won consolidated fiscal surplus, a 0.1% of GDP managed fiscal deficit and a debt-to-GDP decline from 51.6% in 2026 to 48.3% in 2027, before rising to 49.0% in 2030. Moody’s cautioned that debt would remain above the 44% median for Aa-rated countries, while treasury-bond interest costs are projected to reach 51.1 trillion won and mandatory spending 537.8548 trillion won by 2030.