Lee Jae-myung Wins South Korea's Presidential Election: A New Political Chapter Begins

Seoul – Lee Jae-myung, the leader of South Korea’s Democratic Party, has officially been elected President in a snap election, marking a dramatic turning point in the nation's political landscape. His victory comes in the wake of a constitutional crisis that led to the impeachment of former President Yoon Suk Yeol.

A Narrow but Significant Victory

According to the National Election Commission, Lee secured 49.42% of the vote, defeating conservative candidate Kim Moon Soo, who garnered 41.15%. This early election was triggered after former President Yoon was removed from office in April by the Constitutional Court for his attempt to impose martial law late last year.

Lee, who narrowly lost to Yoon in the 2022 presidential race, made a strong comeback, leading the polls leading up to the election.

Immediate Inauguration Without Transition Period

As reported by Yonhap News, Lee will be sworn in immediately at 11:00 a.m. local time at the National Assembly, skipping the traditional 60-day transition period. He will assume presidential duties directly from acting President Han Duck-soo.

Key Challenges Ahead

With a five-year term ahead, President Lee faces a complex landscape of economic, diplomatic, and political challenges:

1. Reviving the Economy

The South Korean stock market responded positively, with the Kospi index surging over 2%, reaching a 10-month high.

The Korean won strengthened to 1,376.3 KRW/USD.

Lee is expected to implement expansionary fiscal policies, provide strategic industry support, and push for corporate governance reforms to boost the capital market.

2. Trade Negotiations with the U.S.

South Korea and the U.S. had previously agreed to finalize a tariff package deal by July 8.

Lee, however, suggested extending the deadline, citing the need to compare terms negotiated by other countries like Japan.

According to Eurasia Group, Lee is likely to adopt a more cautious and left-leaning approach to economic and foreign policy after campaigning from the political center.

Alliance with the U.S. Under Pressure

Tensions over U.S. military commitments in Korea are rising as the U.S. reportedly considers cutting troop levels below 20,000 for the first time. Analysts anticipate tough negotiations on increased defense cost-sharing.

Meanwhile, U.S. Secretary of State Marco Rubio congratulated Lee and reaffirmed the “ironclad alliance” between the two countries, grounded in the Mutual Defense Treaty and strong economic ties.

However, former President Donald Trump has hinted at demanding higher financial contributions from South Korea for maintaining U.S. forces on the peninsula.

Monetary Policy and Market Outlook

The Bank of Korea recently cut interest rates to 2.5%, the lowest since August 2022, anticipating a sharp slowdown in growth.

Goldman Sachs predicts the policy rate may fall to 2.25% by year-end and expects Lee to prioritize a quick cabinet formation and the passing of expansionary budgets.

The Korean won is also expected to appreciate further as political uncertainty declines and the U.S. dollar weakens across Asia.

Conclusion

Lee Jae-myung’s election ushers in a new era for South Korea, with hopes for economic recovery, policy reform, and renewed global diplomacy. While the road ahead may be fraught with challenges—both domestic and international—Lee’s leadership marks a significant reset in the country’s trajectory.

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