South Korean President Moon Jae-in shakes hands with North Korean leader Kim Jong Un as they arrive for their meeting at the headquarters of the Central Committee of the Workers' Party of Korea in Pyongyang, North Korea, September 18, 2018.

As South Korea's economy stumbles, the government is looking to spend hundreds of millions on economic and cultural projects with its northern neighbor. The initiatives are seen as long-term investments to peace, but they threaten to inflate Seoul's debt load and may become a burden if inter-Korea relations hit a road-bump, experts warned.

In a September bill to parliament, South Korean President Moon Jae-in's government proposed spending $419 million for various North Korea-related ventures that include family reunions, a joint liaison office as well as sporting exchanges. Those commitments were first mentioned in a declaration signed by Moon and North Korean leader Kim Jong Un back in April.

The $419 million figure refers only to 2019 expenditures, and opposition politicians have accused the government of deliberately concealing long-term costs for fear of public backlash. That's led to a delay in ratifying the bill.

The multimillion-dollar proposals come as some grow increasingly concerned about South Korea's slowing economy. While the majority of South Koreans say they want peace with Pyongyang, many believe the domestic state of affairs should be a priority for public funds, especially at a time of weak growth.

South Korea's full-year gross domestic product is seen at 2.9 percent this year, compared to 3.1 percent last year. Meanwhile, the pace of job creation hit its weakest level in nine years after Moon raised minimum wages and cut working hours — moves that have made it difficult for small and medium-sized enterprises to hire new workers.

Public discontent with the economy actually pushed Moon's approval rating to 49 percent, the lowest level since he entered office last May, according to a Gallup Korea survey on Sept. 7. The leader's rating ticked up to 50 percent, however, in Gallup's following survey a week later.

"Regardless of diplomacy, spending tens of billions of dollars in North Korea at a time when many South Koreans are unhappy with their own economy could be tough to sell politically," said Kyle Ferrier, director of academic affairs and research at the Korea Economic Institute of America.

The Blue House, the office of South Korea's president, didn't respond to CNBC's request for comment.