Korea Economic Comment: Fiscal spillovers starting to take shape?

Research evidence excerpt

Korea Economic Comment: Fiscal spillovers starting to take shape?

Economics ● Korea

14 July 2026

Chart 3: Korea’s long-term fiscal Chart 4: National tax revenues: historical

soundness remains concerning vs. LT trend*

Source: BIS, CEIC, MOFE, HSBC; Note: *based on national data for PH & VN; Source: CEIC, HSBC; Note: *the LT trend is calculated based on HP-filtered annual

APAC includes 14 economies under HSBC coverage, excluding Bangladesh & Sri growth rates and does not imply how the government will determine a LT trend in

Lanka practice

Table: 2H26 Economic Policies: 3 Key Areas & 6 Major tasks for the 3-4-5 Vision

3 Areas 6 Major tasks Detailed objectives

- Build an integrated response system and operate balanced macro policies

- Stable macroeconomic

- Strengthen response to “three-high” risks (high prices / high exchange rate / high interest rates)

management

1. Post–Middle East - Support housing stability

Conflict Strategy - Build a resilient supply chain

- Secure K-supply chain

- Expand renewable energy and strengthen foundations for decarbonised energy self-reliance

and energy self-reliance

- Strengthen strategic economic co-operation

- Foster global ultra- - Three mega-projects (Semiconductors, AIDC, Physical AI)

competitive growth - Foster “super-innovation” growth engines

2. Rebound in Potential engines - Strengthen the foundation for developing growth engines

Growth - Build regional economic growth engines

- Strengthen region-led

- Improve local living conditions

growth

- Establish the base for regional growth

- Respond to AI-driven labour market restructuring

- Support youth advancement

- Overcome polarisation

- Support SMEs and vulnerable groups to grow and recover

- Narrow labour-market gaps

3. Address Structural - Major shift towards productive finance