South Korea's defense budget to surpass 60 trillion won as regional tensions increase

South Korea's defense budget for 2025 has been set at over 60 trillion won ($45.5 billion) for the first time ever, reflecting the government's focus on key military initiatives.

The logo of the Ministry of National Defense [YONHAP]

South Korea's defense budget for 2025 has been set at over 60 trillion won ($45.5 billion) for the first time ever, reflecting the government's focus on key military initiatives, such as strengthening the "Three-Axis" deterrence system against North Korea and improving military personnel treatment amid an intensifying arms race in East Asia.

The Ministry of National Defense announced its new budget of 61.6 trillion won, marking a 3.6 percent increase from this year, during a Cabinet meeting on Tuesday. Once approved by the National Assembly, this budget will surpass the 60-trillion-won threshold — only five years after it crossed the 50-trillion-won mark in 2020.

The increase comes amid increased military spending among neighboring countries. China has maintained a 7.2 percent annual increase in defense spending for the past two years, while Japan raised its defense budget by 26 percent last year.

The majority of the budget increase is allocated to operational expenses for military forces, which will rise by 4.2 percent to 43.5 trillion won.

Significant investments are planned to improve the treatment of military personnel, including raising soldiers' salaries from 1.25 million won this year to 1.5 million won next year. A high-interest savings program could boost soldiers' monthly income to 2.05 million won upon discharge.

A substantial portion of the operational budget, 786.3 billion won — a 49.5 percent increase — will be dedicated to improving housing facilities for military personnel, including upgrading outdated accommodation and ensuring quarters have capacity for "one room per person."

The budget for defense capability improvement will increase by 2.4 percent to 18.1 trillion won, with a focus on enhancing the Three-Axis system. This includes the Kill Chain pre-emptive strike system, the Korean Air and Missile Defense System composed of multi-layered missile interceptors and the Korea Massive Punishment and Retaliation campaign, which is aimed at eliminating the adversary's command and control by neutralizing its leadership and military facilities.

Key allocations include 3.03 trillion won for the Kill Chain platform, including the second phase of the F-35A stealth fighter project, as well as investments in electronic warfare equipment and the Maritime Helicopter II to disrupt North Korean communications.

Additionally, 1.1 trillion won will be allocated for the first mass production of the KF-21 Boramae fighter jet, and 71.2 billion won will be dedicated toward beginning the mass production of laser air defense systems. The additional 500 billion won required due to Indonesia's reduced share in the KF-21 development project is expected to be reflected in the 2026 budget.

The Ministry of Unification also announced its 2025 budget Tuesday, totaling 1.06 trillion won — a 3.7 percent decrease from this year. The budget reflects South Korea's shifting priorities amid ongoing challenges in inter-Korean relations, focusing more on internal support mechanisms for defectors and human rights while scaling back on cooperation projects with North Korea.

Funding for key initiatives under President Yoon Suk Yeol's "Aug. 15 Unification Doctrine" has increased.

The basic settlement allowance for defectors will rise from 10 million won to 15 million won, with additional bonuses provided for vulnerable groups, such as those with disabilities. The settlement allowance was raised from 8 million won in 2022 to 9 million won last year, and then to 10 million won this year.

The budget for establishing the National North Korean Human Rights Center increased to 10.7 billion won. The budget for the Global Korea Forum, aimed at fostering global discourse on unification issues, was raised to 1.6 billion won.

While the overall Inter-Korean Cooperation Fund was reduced, the budget for humanitarian aid increased by 16.5 percent, totaling 112.2 billion won. This fund is primarily designated for providing relief supplies, such as rice, in the event of disasters, though the actual execution rate for the aid is expected to remain low due to the current halt in inter-Korean exchanges.

The budget for social and cultural exchanges, including inter-Korean human exchanges, has been set at 10.4 billion won, a 35 percent decrease from last year. Similarly, funding for the reunions of separated families has been reduced by 25 percent to 13.4 billion won. The budget for the infrastructure development of the Kaesong Industrial Complex has been slashed by 70 percent, down to 2.2 billion won.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]