South Korea’s new President Lee begins moves to tackle economic ‘crisis’

SEOUL – New South Korean President Lee Jae-myung held his first Cabinet meeting on June 5 focused on devising an emergency package to address stagnating economic growth and aid households, moving swiftly to start tackling a top campaign pledge.

Mr Lee

took office on June 4

just hours after riding a wave of anger over a brief martial law imposed by former president Yoon Suk Yeol to win the snap election. The attempt at military rule led to Yoon’s ouster and sent shockwaves through Asia’s fourth-largest economy.

In brief remarks open to the media, Mr Lee told the Cabinet – carried over from the caretaker government put in place following Yoon’s impeachment in December 2024 – that there was no time to waste in getting to work as the people were facing hardship.

Mr Lee has so far only nominated a close political ally and legislative veteran as prime minister, and he is racing to form a Cabinet and staff his office to maintain continuity in administration.

The new leader expressed bewilderment on June 4 after walking into the presidential office to find it stripped of computers, printers and even pens, and that it was

quiet like “a graveyard”,

with government officials who had been assigned there sent back to their posts.

Most of the officials have been ordered back, Mr Lee’s spokesperson said on June 4.

Mr Lee has made economic recovery one of his top priorities and vowed to immediately unleash fiscal spending of at least 30 trillion won (S$28.4 billion) to boost growth, which was projected by the central bank in May to be almost half of its earlier estimate in 2025 at 0.8 per cent, down from 1.5 per cent in February.

Mr Kim Min-seok, whose appointment as prime minister requires parliamentary approval, said on June 4 that the country was facing even more economic turmoil than during the 1997 Asian financial crisis, complicated by unfavourable external factors.

“Today, the economy is heading downward and stagnating, which is why I believe it’s much more difficult,” he told reporters.

The previous government had made little progress in trying to assuage crushing US tariffs that would hit some of the country’s major export-reliant industries, including autos, electronics and steel.

Mr Lee faces what could be the most daunting set of challenges for a South Korean leader in decades, analysts said, ranging from healing a country deeply scarred by the martial law attempt to tackling unpredictable protectionist moves by the US.

On June 4, Mr Lee withdrew the nomination of two judges to the Constitutional Court, made by acting president Han Duck-soo before the election, his office said. Mr Lee previously said Mr Han had no power to nominate judges as an unelected acting leader.

The ruling Democratic Party-controlled Parliament also passed on June 5 special counsel acts to investigate

Yoon on insurrection charges

and his wife Kim Keon Hee over corruption allegations.

The party had previously passed the special counsel acts on multiple occasions, but they were repeatedly vetoed by Yoon and then the acting president.

Yoon is currently facing a separate trial on insurrection charges. REUTERS