Korea: Fiscal implications of the tech windfall

研报英文原文证据摘录

Korea: Fiscal implications of the tech windfall

Seok Gil Park (82-2) 758-5509 Asia Pacific Economic Research J P M O R G A N

seok.g.park@jpmchase.com Korea: Fiscal implications of the

JPMorgan Chase Bank, N.A., Seoul Branch tech windfall

Jooeun Kim (82-2) 758-5512 25 June 2026

jooeun.kim@jpmorgan.com

JPMorgan Chase Bank, N.A., Seoul Branch

through 2029, meaning that—absent institutional change— cal impulse—the change in cycle- and windfall-adjusted pri-

public debt could decline sharply year after year if spending mary balance—over the next three years would be neutral to

does not scale one-for-one with the windfall revenues. How- modestly positive. That said, depending on how the windfall

ever, retiring debt ‘too quickly’ could itself become a market savings are ultimately used, there could also be sizable addi-

shock—potentially distorting monetary policy transmission in tional stimulus via such off-budget spending channels, which

the interest rate market. In addition, Korea’s fiscal framework would add upside risk to the contribution of government

earmarks roughly 21% of internal tax revenues to local edu- spending to GDP growth.

cation transfers, implying a risk of sharply higher inefficiency

from rigid spending allocations. Fiscal buffer: Rationale and design

There is still no concrete decision on how the tax windfall

Scenario 2: Windfall separation will be handled. Yet recent comments from senior govern-

For these reasons, we view Scenario 1 as a mechanical pro- ment officials suggest two broad objectives: (i) financing

jection under the current system, but a highly unlikely out- investment that raises long-run growth potential, and (ii) sup-

come in practice given the expected drawbacks of the scenar- porting measures to mitigate polarization associated with

io.