SEOUL (BLOOMBERG) - South Korean President Yoon Suk Yeol was already struggling with surging inflation, rising Covid-19 cases and historically low approval numbers.

Then, he launched into a potentially explosive feud with the nation's police force.

Mr Yoon spent Tuesday (July 26) defending his proposal to create a "police bureau" and assume greater control over the powerful law enforcement agency, a move that has prompted protests by senior officers.

As his interior minister attempted to walk back comments comparing the demonstration to a "military coup," Mr Yoon accused the officers of a lesser offence, saying they may have displayed a "serious breach" of discipline.

The dust-up with the police is just the latest controversy to consume Mr Yoon's administration since his narrow election victory in March.

After his struggles to relocate the presidential offices and follow through on a pledge to close the Gender Equality Ministry, the conservative-backed administration has seen its approval rating sink below 40 per cent after two months in office - the first time that has happened for an elected South Korean president in a tracking poll by Realmeter.

The poll numbers, which have fallen more since then, have raised doubts about whether Mr Yoon can recover.

While he spends precious political capital over reforms, he's facing increasing public anger over inflation and runaway urban real estate prices.

"Yoon's government is fighting needless battles as opposed to fighting some of the real problems of the country, such as the surges in the inflation rate and coronavirus cases," said Dr Lee Junhan, a political science professor at the Incheon National University.

South Korea's Cabinet passed a measure Tuesday endorsing the establishment of what would be known as a police bureau, in which the government's Interior Ministry would oversee aspects of the law enforcement agency.

Scores of senior police officers have protested the move, claiming it would compromise their neutrality and hearkens back to the days of dictators.

The move hits on a sensitive subject for a country that last saw a coup in 1979 and restructured its government in the late 1980s to remove vestiges of authoritarian rule.

Interior Minister Lee Sang-min on Monday compared the police protest to the 1979 coup, only to later clarify that he "wouldn't call the move a rebellion."

The next day, Mr Yoon reiterated criticism of the police, saying any breaches of discipline would be dealt with accordingly.

"Like many, I am also deeply concerned about the collective protest of the police chiefs," he told reporters.

Mr Yoon has faced a bumpy political honeymoon. After making a name for himself by prosecuting government officials for graft, he faced criticism for appointing people to his new government who faced similar allegations.

Strikes that unfolded in the trucking and shipping sectors stoked worries about the export-driven economy.

On top of that, the opposition camp holds a majority in Parliament large enough to override a veto and has shown little willingness to seek compromise with a damaged leader.

"What the public wants at this point is the Yoon administration becoming more sensitised and responsive to the low approval ratings - take the feedback and make the necessary adjustments to state management," said policy analyst Soo Kim with the Rand Corporation who previously worked at the Central Intelligence Agency.

If Mr Yoon doesn't make changes, Ms Soo said it could undermine progress he has made to restore frayed ties with the US and raise South Korea's stature in international groupings such as the North Atlantic Treaty Organisation (Nato), which have taken on greater importance due to Russia's invasion of Ukraine.

"A weak domestic position is likely to set Yoon up for an unimpressive performance on the international front, making it all the more critical for the South Korean president to take the early criticisms seriously as an urgent call for improvement and rebound," she said.

While there's still time for Mr Yoon to reverse the decline, he faces several challenges. His conservative People Power Party in embroiled in internal squabbles, with its leader in July being suspended for six months in an alleged sex scandal.

Meanwhile, South Korea has been among the nations most exposed to global inflationary pressure and Fed policy tightening.

Its trade deficits have been snowballing on rising energy and commodity prices while capital outflows have weakened the won to the lowest level since the global financial crisis.

Inflation hit 6 per cent in June, its strongest reading since late 1998.

The won has been Asia's worst performer after the yen this year, making imports more expensive for households and manufacturers.

Mr Yoon has been seeking moves for stability in the housing market. His government has rolled out plans to cut corporate and income taxes, seeing the measures as spurring growth and helping those hurt by inflation.

His government plans to submit legislation on this in early September.

But the opposition Democratic Party has shown more support for measures to keep prices lower for those hard hit by inflation that could include subsidies.

One level for Mr Yoon will be a support rate that nears 20 per cent - considered a danger zone for leadership.

"If it's under 20 per cent, even the ruling party also usually distances itself from the presidential office," said political science professor Shin Yul at Myongji University in Seoul.

"This ultimately weakens the driving power of the president's in terms of policies."