The government is fully activating a fiscal strategy consultation channel between the central and local governments to support "local-led growth," the core governance philosophy of the Lee Jae-myung administration.
The Ministry of Planning and Budget said on the 26th that it held the "Central-local fiscal strategy council" at the Glad Hotel Yeouido in Seoul, with deputy heads from 17 metropolitan and provincial governments attending. This is the first official consultative body with local governments since the ministry was launched in January.
An official at the Ministry of Planning and Budget said, "Local-led growth is about positioning localities not as targets of charitable support but as core engines of growth that will stand tall and lead Korea's new takeoff." To that end, the ministry presented three directions: ▲ on-site, tailored fiscal support ▲ strategic budget allocation to foster regional strategic industries and respond to population extinction ▲ building policy partnerships based on communication and trust.
In particular, the government plans to create a "super-regional special account" within the Special Account for Balanced National Development to support cooperative projects at the super-regional level. The "2026 budget formulation guidelines," to be prepared next month, will also include measures to reflect fiscal incentives for establishing local growth hubs centered on five poles and three special zones, as well as for local preferences and administrative integration.
It asked local governments to actively propose investment-focused directions and tasks for institutional improvement. It also asked them to establish a constant inspection system by local government for unapportioned and unreturned national subsidies to enhance fiscal transparency.
Starting in the second half of the year, the Ministry of Planning and Budget plans to institutionalize the council as a standing, minister-level strategic platform with participation from relevant ministries and local governments, to regularize fiscal and strategic cooperation between the central and local governments.
Lim Gi-geun, Vice Minister serving as acting Minister of the Ministry of Planning and Budget, said, "We will actively reflect the voices from the field raised today in the drafting of the 2027 budget bill and the mid- to long-term national development strategy," adding, "We will go beyond simple budget support so local governments can design their own growth engines and build competitiveness."