Lee Jae Myung Leads South Korea’s Snap Presidential Race After Yoon’s Impeachment

South Korea’s opposition leader Lee Jae Myung is leading the country’s snap presidential election, triggered by the impeachment of former president Yoon Suk Yeol, according to a Gallup poll cited by Yonhap News.

Lee Jae Myung Holds Strong Lead Ahead of Vote

Lee, who narrowly lost the 2022 election to Yoon, is now the frontrunner in this unexpected race. The latest Gallup poll shows 49% support for Lee, compared to 35% for his conservative rival Kim Moon Soo, representing the People’s Power Party (PPP), which Yoon was formerly a member of.

What Led to the Snap Election?

The election was called after Yoon Suk Yeol was removed from office by South Korea’s Constitutional Court in April, following his controversial declaration of martial law in December 2024. The move sparked mass political unrest and ultimately led to his impeachment.

Economic and Diplomatic Implications of a Lee Presidency

If elected, Lee Jae Myung, representing the Democratic Party (DP), is expected to shift South Korea's domestic and foreign policy significantly — especially in areas such as economic recovery, U.S. tariff negotiations, and relations with China and North Korea.

Analysts at Eurasia Group consider Lee the “clear favorite,” giving him an 80% chance of winning. Though Lee has taken a more centrist tone during the campaign, he is likely to pursue left-leaning policies once in office, Eurasia noted.

Key areas to watch include:

The scale of a second supplementary budget;

Trade negotiations with the U.S., particularly over tariff packages.

Lee has already called for an extension of the July 8 deadline for finalizing tariff negotiations with Washington. He has signaled that South Korea should benchmark its deal against similar agreements with countries like Japan before finalizing terms.

Comparing Economic Visions: Lee vs. Kim

In a recent note, Goldman Sachs pointed out that while both candidates agree on goals like economic growth, stable financial markets, and housing affordability, their approaches differ significantly:

Lee Jae Myung supports fiscal stimulus for strategic industries and favors governance reform to strengthen equity markets.

Kim Moon Soo advocates deregulation, tax cuts, and private-sector-led growth, with an emphasis on tax incentives to boost markets.

Goldman added that under Lee’s leadership, fiscal policy is likely to be more expansionary, while monetary policy from the Bank of Korea (BOK) may act as a counterbalance. The BOK recently cut interest rates to their lowest since August 2022, citing a sharp decline in expected growth.

South Korean Won Poised to Strengthen Post-Election

Regardless of who wins, the South Korean won is likely to appreciate against the U.S. dollar following the election, according to Goldman Sachs. The firm attributes this to reduced policy uncertainty and broader USD weakness across Asian markets.

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Source: CNBC