"Next Year's Budget Only Includes R&D Restoration and Contingency Fund Expansion"…Nation Lacks 'Future Strategy'

As a result of a detailed analysis of next year's budget by project units, it was pointed out that there is no 'strategic goal' to be found except for the restoration of the research and development (R&D) budget and the increase in contingency funds. Other budget increases are merely natural increases due to the growing elderly population and inflation.

On the 16th, the Nara Salrim Research Institute diagnosed the nature of projects that were cut or increased compared to this year by classifying them by field, sector, and program in a report titled 'Status, Meaning, and Issues of Budget Cuts and Increases in the 2025 Budget Proposal.'

According to the analysis, government spending itself increased by 3.2%, but discretionary spending (budgets that the government can adjust in terms of target and scale, excluding legally mandated expenditures) increased by only 0.8%. The institute analyzed, "Most of the increases are legally mandated expenditures due to inflation and the growing elderly population, and increases based on the government's policy intentions are limited."

＜Reduction and Increase in Budget by Sector for 2025 Compared to the 2024 Original Budget＞
Provided by: Nara Salrim Research Institute

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When analyzed by sector, the only fields that saw a net increase exceeding 5% compared to this year were the science and technology sector (17.3%) and the contingency fund sector (14.3%). Thanks to this, the R&D increase was restored to the 2023 level in total volume, but the R&D budgets for small and medium enterprises, carbon neutrality, local governments, and joint research have not recovered compared to this year.

Of course, the welfare budget increased by 1.09 trillion won, but the institute explained that this was due to increases in public pensions (750 billion won) and elderly budgets (180 billion won) resulting from population growth and inflation, not from policy-driven increases.

Lee Sang-min, senior research fellow at the Nara Salrim Research Institute, said regarding the report, "There is no confirmation of the government's will in next year's budget regarding low birthrate and aging, increased welfare demand, increased R&D investment demand due to new technologies, the declaration of the local era, or security crises," adding, "The National Assembly needs to review next year's government proposal within the broader framework of the country's fiscal strategy through more transparent and constructive discussions."

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