Signal Mandatory spending absorbs most budget growth while the tax burden ratio has fallen

Summary

The government reports that total spending has been held down while most of the increase goes to mandatory expenditure. Mandatory spending rose from 340.3 trillion won in 2023 to 347.4 trillion in 2024 and 365.0 trillion in 2025, an average annual increase of 8.2 percent from 2021 to 2025. Discretionary spending is described as low in productivity and performance because it lacks selection and concentration. On the revenue side, tax cuts and expanded tax expenditures have weakened the revenue base. The tax burden ratio fell from 22.1 percent in 2022 to 19.0 percent in 2023 and a preliminary 17.6 percent in 2024.