Publication

France Did Not Sufficiently Reverse Its Added Spending: Where Are Korea's Long-Term Public Finances Heading?

The OECD's 2026 Economic Survey of France found that France and the euro area increased primary spending by similar amounts during the 2008-2009 financial crisis, but by 2019 France had reversed about half of that increase and the euro area about three-quarters. France's general government debt stood at 119.0% of GDP at the end of the second quarter of 2026. The Korean government's Third Long-Term Fiscal Projection estimated that, if current institutions are maintained, the national debt ratio will rise from 49.1% of GDP in 2025 to 156.3% in 2065; in the same projection, mandatory spending as a share of total spending goes from 51.7% in 2025 to 64.8% in 2055 (calculated value). National tax revenue for 2026 was re-estimated at 478.6 trillion won, and the government's 2027 budget proposal includes a plan to create a Future Response Fund that accumulates additional tax revenue and other resources. The brief sets out four tasks: updating the long-term projection and disclosing it by item, disclosing later-year requirements of the fund's programs, the fund's range of changes and reporting to the National Assembly, and linked disclosure of tax revenue re-estimates and fund accumulation. In an Institute for Reform survey (RIO 2026-14), 59.8% of respondents said Korean society's ability to resolve serious social conflict peacefully through dialogue and compromise is not high.