Next Year’s Defense Budget Sees Largest Increase in 7 Years... 9 Trillion Won Invested in South Korea’s Three-Axis System

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The government has made the largest increase in the national defense budget in seven years for 2026, in response to the United States' request for "modernization of the South Korea-U.S. alliance." Approximately 9 trillion won will be invested to strengthen South Korea’s three-axis defense system in order to counter North Korea’s nuclear and missile threats and to prepare for the transfer of wartime operational control. In addition, the budget for research and development (R&D) in the defense sector will be increased by about 20% to lay the foundation for building a science and technology-based strong military.

According to the 2026 national defense budget proposal submitted by the Ministry of National Defense to the National Assembly on September 2, out of the 20.1744 trillion won allocated for defense capability improvement, 8.9049 trillion won has been set aside for the three-axis defense system. This represents an increase of approximately 22.3% compared to this year’s related budget of 7.2838 trillion won.

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Breaking down the details, 5.3065 trillion won will be allocated for kill chain capabilities such as the initial mass production of the KF-21 Boramae, 1.8134 trillion won for Korean-style missile defense assets such as Gwanggaeto-III Batch-II, 739.2 billion won for massive retaliation assets such as the CH-130H performance upgrade, and 1.0458 trillion won for surveillance, reconnaissance, and command and control foundational assets such as the second batch of airborne early warning and control aircraft.

Additionally, the government will strengthen advanced military capabilities by investing 48 billion won in 18 new projects, including R&D for long-range air-to-air guided missiles that can be mounted on the KF-21.

The defense sector R&D budget for fostering an AI-powered, science and technology-based military has been set at 5.913 trillion won, an increase of about 19.2% compared to the previous year. Of this, 5.8381 trillion won is allocated for defense capability improvement, up 19.4%, and 74.9 billion won for power operation, up 4.5%.

For future-challenge defense technologies, such as technology investment to establish the foundation for developing fifth-generation fighter jets, 349.4 billion won has been allocated, an increase of about 39.5% from the previous year. New projects include the AX Sprint project (60 billion won) to utilize advanced civilian AI technology in defense, the establishment of military-industry-academia cooperation centers (19.5 billion won), and the creation of an AI-based CCTV surveillance system (6.1 billion won). Furthermore, 20.5 billion won will be invested to secure small commercial drones for training and to train professional instructors, with the goal of producing 500,000 drone warriors.

The budget for improving the treatment of military officers, in response to a shortage of military personnel, has also been increased. Duty allowances for military officers will be raised from the current 20,000 and 40,000 won on weekdays and holidays, respectively, to 30,000 and 60,000 won. In consideration of the unique nature of their jobs, moving expenses for ladder truck use will also be newly supported. Additionally, to attract outstanding junior officers, a new "Youth Officer Tomorrow Savings Account" (tentative name) will be introduced, and eligibility for short-term service incentives will be expanded.

Meanwhile, the government has set the 2026 national defense budget at 66.2947 trillion won, an 8.2% increase from this year, marking the largest increase in seven years. This is seen as partially accommodating the U.S. request for "modernization of the South Korea-U.S. alliance," which calls for defense spending equivalent to 3.5% of GDP (on a direct basis) from its allies. A Ministry of National Defense official commented, "It would not be unreasonable to view this as a preemptive measure in consideration of the modernization of the South Korea-U.S. alliance."

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