South Korea's President Moon Jae-in said Seoul would increase military spending and urged the North to return to dialogue in a budget speech Tuesday that could infuriate Pyongyang with nuclear talks gridlocked.
Contact between North and South Korea stalled after the collapse of a February summit between North Korean leader Kim Jong Un and US President Donald Trump in Hanoi.
Since then Pyongyang has excoriated its neighbour over joint military drills with the US, and the acquisition of American fighter jets.
It is a far cry from the cross-border warmth of last year, when Moon seized on the Pyeongchang Winter Olympics to broker the North-South discussion process and held three summits himself with Kim.
South Korea will increase defence spending by seven percent to more than 50 trillion won (USD 42 billion) next year, Moon told parliament, emphasising that "strong defence" was crucial for "self-determination".
"We will strengthen the core defence system by boosting assets such as next-generation submarines and surveillance satellites."