On June 4, 2025, South Korea’s opposition leader Lee Jae-myung of the Democratic Party won the presidency in a snap election, securing 49.42% of votes against conservative Kim Moon Soo’s 41.15%, per the National Election Commission. Lee, sworn in at the National Assembly at 11 a.m. local time, assumes office immediately from acting president Han Duck-soo, bypassing the usual 60-day transition.
Political and Economic Context
The election followed the impeachment of former president Yoon Suk Yeol, ousted in April after a controversial martial law declaration in December 2024. Lee, who narrowly lost to Yoon in 2022, overcame legal hurdles over election law charges, with a court ruling delayed until after the vote. His centrist campaign shift won over independents, though Eurasia Group predicts a left-leaning agenda, focusing on fiscal expansion and governance reforms.
Lee faces pressing challenges: reviving South Korea’s economy amid 2.5% interest rates—the lowest since August 2022—and navigating trade talks with the US, where President Donald Trump pushes for higher troop-hosting payments. Concerns grow over US security commitments, with potential troop reductions below 20,000, per Teneo’s James Brady. Lee seeks to extend tariff talks beyond the July 8 deadline, benchmarking against Japan’s terms, according to Eurasia Group.
Market and Policy Outlook
The Kospi index surged over 2% to a 10-month high, nearing bull market status, while the South Korean won strengthened to 1,376.3 against the dollar. Goldman Sachs forecasts monetary easing to 2.25% by year-end and won appreciation due to reduced policy uncertainty. Lee’s priorities include forming a new cabinet, passing expansionary budgets, and supporting strategic industries, despite trade headwinds and geopolitical tensions with China and North Korea.
US Secretary of State Marco Rubio congratulated Lee, emphasizing the “ironclad” US-South Korea alliance. As Lee shapes South Korea’s global stance, his leadership will define its economic and diplomatic path.
Source: CNBC
