Home > Business > Economy

Ripple effects of impeachment plague Korean economy

Published: 15 Dec. 2024, 18:45

LEE JAE-LIM
[email protected]

Finance Minister and Deputy Prime Minister Choi Sang-mok, far right, speaks before convening an emergency meeting with economy-related ministers at the Seoul Government Complex in central Seoul on Sunday. [NEWS1]

Ripple effects of the passing of the fervently demanded impeachment motion against President Yoon Suk Yeol continue to plague the Korean economy amid political uncertainties.

Finance Minister and Deputy Prime Minister Choi Sang-mok convened an emergency meeting on Sunday following the National Assembly’s impeachment decision with economy-related ministers, pledging to “mobilize all available public and private sector resources to manage the economy as stably as possible.”

It was followed by two other meetings gathering ministers on foreign relations, and sectors of macroeconomic and financial monitoring.

“Our economy is once again being tested,” Choi said before convening the meeting. “However, our economy has shown resilience in overcoming even greater challenges in the past. If the public and businesses trust in our economic strength and continue their activities as usual, we can overcome the difficulty once again. The government will also fully support their endeavors and stay on the ground with our citizens and business firms.”

Economic policy roadmaps for the next year will be released within the month, encompassing four key missions to ensure external creditworthiness, trade environment uncertainties, establish a resilient industrial base and strengthen policies for the stability of public welfare.

Choi also pledged a prompt finalization of key legislations involving industries, such as the special semiconductor act, AI basic act and special power grid act, which supports grid expansion to support burgeoning sectors of AI and chips.

To safeguard the nation’s financial credibility, economic ministries will dispatch a government-led ombudsman task force to resolve challenges faced by foreign investors and hold regular ministerial meetings involving economic and foreign affairs to address economic cooperation, trade issues and supply chain stability.

Economic organizations such as the Korea Enterprises Federation requested the government to strengthen its emergency economic response system while urging the National Assembly to demonstrate bipartisan leadership and cooperation to resolve the crisis “wisely and promptly."

Although immediate political uncertainties have been reduced with the impeachment order, concerns persist as the acting president Han Duck-soo, and the next-in-line candidate, Choi, are under investigation for their involvement in the declaration of martial law.

However, opposition Democratic Party leader Lee Jae-myung has vouched that the party will not pursue impeachment against Han out of concern for national stability.

It is the third impeachment period that the Korean market has faced since the National Assembly passed the motions for former presidents Roh Moo-hyun in 2004 and Park Geun-hye in 2016.

The lasting economic impact is expected to linger for the coming three to six months, according to the Bank of Korea’s report on Sunday.

“During past impeachment periods, favorable external conditions, such as China’s rapid economic growth in 2004 and strong semiconductor market performance in 2016, supported growth through improved exports,” the report said, emphasizing heightened challenges in external uncertainties in the trading environment and rise of global competition in key industries.

“It is necessary to demonstrate as quickly as possible to international markets that Korea’s economic system is functioning properly by reaching agreements between the ruling and opposition parties to implement key economic policies, such as supplementary budgets.”

BY LEE JAE-LIM [[email protected]]