Local Governments Facing Fiscal Crisis... President Lee to Meet with 16 Provincial and Metropolitan Leaders

10th Central-Local Government Cooperation Meeting to Be Held on August 26

First Meeting in Nine Months Since Last November

Discussions on Local-Led Growth and Fiscal Investment Directions

President Lee Jae-myung will hold his first meeting with heads of the ninth-term local governments, who are currently facing severe fiscal difficulties. The meeting will feature comprehensive discussions on fiscal support measures along with local-led growth initiatives.

On August 26, President Lee is set to preside over the 10th Central-Local Government Cooperation Meeting at the Blue House. The Central-Local Government Cooperation Meeting serves as a platform for strengthening cooperation between the central and local governments and reviewing related policies. Although it is typically held on a quarterly basis, this session is taking place for the first time in nine months due to the June 3 local elections.

President Lee Jae-myung is speaking at the cabinet meeting held at the Blue House on the 25th. August 25, 2026. Photo by Yonhap News

This meeting has been arranged amid growing fiscal concerns expressed by local governments. For this year, the consolidated fiscal balance ratio of local governments nationwide stands at -4.93% based on budget figures, marking consecutive years of deficits. Gyeonggi Province and Incheon have already declared a 'fiscal emergency,' and North Chungcheong Province has established a fiscal normalization committee.

Accordingly, during the open discussion, in which President Lee will participate, it is likely that calls will be made to expand fiscal support for local governments. Concerns are expected to be raised, especially because some analysts are predicting a reduction in local grants as the government pushes ahead with the Future Response Fund initiative.

The central government will present on: △cooperation measures between the central and local governments for the ninth-term administrations, △strategies for promoting local-led growth, △plans to foster region-specific growth engines linked to three major mega projects, and △fiscal investment directions to advance balanced regional development. The 16 provincial governors and metropolitan mayors will outline their successful strategies based on regional conditions and strengths. Additionally, a revision to expand the representation of basic local governments will be put to a vote.

The meeting will be attended by central government officials, including Prime Minister Han Seong Sook, as well as local government heads such as Park Chan Dae, President of the Association of Metropolitan and Provincial Governors of Korea (and Mayor of Incheon Metropolitan City). From the Blue House, Chief of Staff Kang Hoon Sik and Policy Chief Kim Yong Beom will also join.

The Blue House stated, "By using this meeting as an opportunity, we plan to further strengthen cooperation between the central and local governments and ensure that the synergy between regional strategies and central government support leads to tangible results for local-led growth."

This content was produced with the assistance of AI translation services.