As President Lee Jae-myung pushes forward with an expansionary fiscal agenda, South Korea plans to issue close to a record level of 222.8 trillion won in bonds in 2027. According to four unnamed officials familiar with the Ministry of Planning and Finance and the Ministry of Planning and Budget, of the above funds, 110.7 trillion won will be used to repay maturing debts, and 15.9 trillion won will be used for market making operations, such as buybacks. An informed official requested anonymity due to discussions on internal policies. This will bring the net circulation to approximately 96.3 trillion won. The total amount of the above issuance was disclosed in the 2027 budget proposals announced by the two departments on Tuesday. The distribution scale in 2027 is comparable to this year's record 232 trillion won proposal. However, South Korea's latest budget calls for a 12.8% increase in government spending next year to 820.9 trillion won. Most of this record spending will be raised by issuing new bonds, and borrowing may heighten concerns about government spending and further boost yields.

As President Lee Jae-myung pushes forward with an expansionary fiscal agenda, South Korea plans to issue close to a record level of 222.8 trillion won in bonds in 2027. According to four unnamed officials familiar with the Ministry of Planning and Finance and the Ministry of Planning and Budget, of the above funds, 110.7 trillion won will be used to repay maturing debts, and 15.9 trillion won will be used for market making operations, such as buybacks. An informed official requested anonymity due to discussions on internal policies. This will bring the net circulation to approximately 96.3 trillion won. The total amount of the above issuance was disclosed in the 2027 budget proposals announced by the two departments on Tuesday. The distribution scale in 2027 is comparable to this year's record 232 trillion won proposal. However, South Korea's latest budget calls for a 12.8% increase in government spending next year to 820.9 trillion won. Most of this record spending will be raised by issuing new bonds, and borrowing may heighten concerns about government spending and further boost yields.