Lee Jae-myung, the leader of the Democratic Party of Korea, is projected to win the upcoming snap presidential election in South Korea, according to a Gallup poll reported by Yonhap. This could position him as the successor to the impeached former president Yoon Suk Yeol, influencing the future of South Korea’s trade relations with the United States and its policies regarding China and North Korea.
Yoon was removed from office in April by the Constitutional Court following his controversial declaration of martial law last December, which prompted this extraordinary election. Lee, who narrowly lost to Yoon in the 2022 presidential elections, currently enjoys a significant polling advantage, with Gallup indicating 49% of respondents favoring him, compared to 35% for his nearest competitor, Kim Moon Soo from the conservative People’s Power Party.
Despite facing questions about his presidential eligibility due to election law breaches, a High Court ruling on his case will be deferred until after the election. Analysts from Eurasia Group have named Lee the “clear favorite” for victory, estimating an 80% chance of winning. They highlight his recent shift toward the political center, aimed at appealing to independent voters, but suggest he may pursue a more left-leaning policy agenda upon taking office.
Important aspects to monitor include the scale of additional budget plans and Lee’s strategy concerning tariff negotiations with the U.S. He has indicated a preference for extending the deadline for these talks, which had been scheduled to culminate by July 8.
Goldman Sachs also observed parallels between the economic aspirations of both candidates, with a focus on growth and housing affordability. However, their strategies diverge significantly; Lee advocates for government fiscal support for vital industries, while Kim leans towards deregulation and tax reductions to stimulate private sector growth. Goldman predicts that Lee’s fiscal policy would be more expansionary than Kim’s, with the Bank of Korea’s recent interest rate cuts intended to stimulate economic growth amid challenges.
Regardless of the election’s outcome, market analysts expect the South Korean won to strengthen against the U.S. dollar, driven by decreased uncertainty following the establishment of a new government and the general weakness of the dollar against Asian currencies.
This election is set against a backdrop of significant economic challenges, but the prospects for positive change and a new direction in leadership may inspire hope among South Koreans looking for stability and growth.