(MENAFN) South Korean President Lee Jae Myung has unveiled his administration’s first budget for 2026, proposing a record 728 trillion won ($505 billion) in spending, an 8.1% increase from the current year, according to reports.

Defense spending is set at 66.3 trillion won ($46 billion), up 8.2%, aimed at modernizing conventional weapon systems and advancing a “self-reliant defense” strategy. “Relying on external forces for our defense is a matter that hurts national pride,” Lee said, pledging to regain wartime operational control from the US by the end of his term in 2030.

The budget also allocates 10.1 trillion won ($7 billion) to accelerate artificial intelligence (AI) development, with the goal of positioning South Korea among the world’s top three AI powers.

During his parliamentary budget speech, Lee emphasized the dual focus on strengthening a self-reliant military and continuing diplomatic efforts with North Korea. He stated that AI technology would help transform South Korea’s defense forces into a “smart and strong” military. “We will significantly strengthen our national defense capabilities and make sure to realize our hope for self-reliant defense,” he said, warning that reliance on foreign nations undermines national pride.

Lee highlighted progress in talks with the US, noting: “Progress in consultations on the supply of nuclear fuel for nuclear-powered submarines has strengthened the foundation for self-reliant defense.” He also mentioned that a recent tariff agreement with the US had helped reduce economic uncertainties.

Last week, Lee requested approval from US President Donald Trump for South Korea to acquire nuclear fuel for submarines, with Trump consenting to plans for South Korea to build nuclear-powered submarines.

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