South Korea’s planned Future Response Fund is facing criticism from state-run research institutes and academics over provisions that could expand government spending discretion, weaken performance oversight and increase debt while large sums accumulate. The fund is planned at 162 trillion won, or 162.3 trillion won in the government’s 2027 budget proposal, with 104.4 trillion won to be deposited as surplus funds and 45.4 trillion won allocated to projects. The Korea Development Institute (KDI) said the fund would not automatically raise potential growth or strengthen public finances. Lee Tae-seok, head of KDI’s Fiscal and Social Policy Research Division, urged National Assembly approval for major changes to the fund’s purpose or transfers between accounts, integrated disclosure of liabilities, financial assets, operating costs and multi-year performance, and a ban on borrowing to finance contributions. KDI also called for objective additional-tax-revenue calculations, revenue scenarios and sensitivity analyses, separate operating rules for fiscal stabilization, growth investment and debt management, and common screening standards for the youth, growth engines, regional development, and education and talent accounts. The institute said minimum crisis liquidity should be secured first, after which fiscal conditions should determine whether funds reduce debt risks or support ready-to-execute growth investments. Academics questioned whether the fund represents genuinely new investment, noting that 61 projects worth about 18.3 trillion won were transferred from existing accounts and that capital and human-capital investments accounted for about 42% of project spending. They also criticized the classification of all 140 sub-projects as not subject to performance management, although the finance ministry said responsible ministries still set indicators and manage them. Concerns also center on a provision allowing major spending items to rise by up to 30% without renewed parliamentary approval. The government says the fund will cushion tax volatility caused by reliance on industries such as semiconductors and support growth through flexible fiscal investment. Cho Yong-beom previously said the 2027 budget proposal would lower the national debt ratio from 51.6% to 48.3%, while the government’s debt projection rises by 106 trillion won to 1,519.8 trillion won next year. The fund’s design is expected to face further scrutiny during the National Assembly’s budget review.