2025 budget to focus on advanced R&D, resolving low birthrate

President Yoon Suk Yeol, center, in the Cabinet meeting held at the presidential office building in Yongsan, central Seoul, on Tuesday. [YONHAP]

Korea's fiscal policy next year will focus on investing in research and development (R&D), resolving the low birthrate and bolstering medical services, the finance ministry said on Tuesday.

R&D was added back as a primary governmental spending focus following strong backlash from the scientific field over its exclusion last year.

The announcement was part of the government's guidelines for the 2025 budget, approved by the Cabinet on the day, which also call for continued commitment to fiscal soundness, according to the Ministry of Economy and Finance.

The ministry has yet to present the exact figure, but it is expected to draw up a budget of around 680 trillion won ($508.1 billion) for next year, an increase of about 4.2 percent on year.

"The government will maintain the stance of fiscal soundness to ensure fiscal responsibility for future generations, while fully meeting demands for the livelihoods of the people," the ministry said in a release.

In detail, the government seeks to increase the budget for R&D investment in advanced technologies for next-generation industry fields, such as the artificial intelligence, bio and quantum sectors.

Strengthening welfare programs for vulnerable groups will also be a focus for next year.

Other policy priorities include devising ways to cope with demographic changes and reform measures for the future.

The government plans to spend more to support child rearing and education, as well as ensure gender equality, to boost the birthrate, the ministry said.

The country's total fertility rate, which is the average number of expected births from a woman in her lifetime, fell to another record quarterly low of 0.65 in the fourth quarter of 2023, down 0.05 from a year earlier, according to data from Statistics Korea.

The figure is below the 2.1 births per woman needed to maintain a stable population without immigration.

With a goal of bolstering security and social safety, the government vowed to increase investment in medical services, particularly in rural areas and essential medical fields such as pediatrics and neurosurgery, which have seen a shortage of doctors.

The government earlier announced an increase in the medical school enrollment quota by 2,000 to deal with the shortage of doctors, the first hike in 27 years.

"We will markedly increase investment in innovative R&D projects and strengthen our responses to the low birthrate," a ministry official said.

"Our focus will also be on better supporting young people and achieving a regional economy by creating decent jobs and improving living conditions in non-metropolitan areas," he added.

Government ministries and agencies will use the guidelines to draw up their spending plans by the end of May, which will be submitted to the National Assembly by Sept. 2 after consulting with various entities and receiving public input.

The Yoon Suk Yeol government has stressed belt-tightening policies to improve national fiscal soundness following years of expansionary spending in response to the COVID-19 pandemic.

BY JIN MIN-JI, YONHAP [jin.minji@joongang.co.kr]