South Korea Begins Clearing 1.2 Trillion Won Unpaid 2025 Defense Budget
South Korea has started paying off a 1.2 trillion won backlog in the unpaid 2025 defense budget. The Finance Ministry expects to complete all payments within the week.
South Korea's Ministry of National Defense has kicked off the process to settle a massive 1.2 trillion won backlog in unpaid bills from 2025. The ministry confirmed on Friday that funds are being distributed to military units and defense contractors in order, addressing a controversy that erupted after payments were stalled at the end of last year.
Addressing the 1.2 Trillion Won Unpaid 2025 Defense Budget
The funding gap, totaling approximately 1.2 trillion won, is split between the Ministry of National Defense itself (500 billion won) and the Defense Acquisition Program Administration (700 billion won). Ministry spokesperson Chung Binna stated during a press briefing that execution started as of 9 a.m. today.
The ministry blamed the delay on a "temporary shortage of funds" caused by concentrated year-end spending across all government sectors. While the defense ministry requested the budget on time, the Finance Ministry couldn't release the cash immediately. However, the treasury has now pledged to provide the necessary liquidity within this week to clear the 2025 defense expenditures.
Impact on the Defense Industrial Base
Defense contractors, many of whom rely on these payments for operational liquidity, have been on edge since the start of the year. The government's swift move to settle the accounts aims to restore stability and ensure that procurement and maintenance projects aren't further hampered by bureaucratic bottlenecks.
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