Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

Opposition win in South Korea election to deepen policy stalemate for Yoon

Published 04/10/2024, 06:49 PM
Updated 04/11/2024, 10:08 AM
© Reuters. South Korea's main opposition Democratic Party (DP) leader Lee Jae-myung, speaks to reporters after watching TVs broadcasting the results of exit polls for the parliamentary election at the National Assembly on April 10, 2024 in Seoul, South Korea. Chung

By Hyunsu Yim and Jack Kim

SEOUL (Reuters) - South Korea's liberal opposition scored a landslide victory in a parliamentary election, vote counts showed on Thursday, dealing a resounding blow to President Yoon Suk Yeol and his conservative party but falling just short of a super majority.

The Democratic Party (DP) was projected to take 175 of the 300 seats in the new assembly, data from the National Election Commission and network broadcasters showed with all votes counted.

A splinter liberal party considered allied with the DP was expected to take 12 seats, projections showed, leaving the bloc short of the 200 seats needed for a super-majority. Yoon's People Power Party (PPP) was set to win 108 seats. An official announcement of the results is due later on Thursday.

DP leader Lee Jae-myung, who led a combative campaign against Yoon, said the top priority now was to work for an economic recovery that is palpable for the average consumer.

"The ruling and opposition parties must join forces to overcome the crisis in consumers' economic livelihood," he said.

The bitterly fought race was seen by some analysts as a referendum on Yoon, whose popularity has suffered amid a cost-of-living crisis and a spate of political scandals.

Yoon, who took office in May 2022, was not up for election this time but his ability to pass legislation is likely to be further inhibited by the PPP's poor showing.

He has suffered low ratings for months, hamstrung in implementing his pledges to cut taxes, ease business regulations and expand family support in the world's fastest ageing society.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Opposition control of parliament will continue a government stalemate in areas where Yoon has clashed with the liberals on policies that require legislation, such as tax incentives for businesses and whether to tax capital gains on stocks, analysts said.

Yoon had "humbly accepted" the result of the election and pledged to renew his administration, his chief of staff said.

Prime Minister Han Duck-soo and other senior aides had also offered to resign after the election defeat, Yonhap news reported.

Political science professor Lee Jun-han of Incheon National University said Wednesday's poll had all the characteristics of a midterm election, with voters delivering a message that the government's economic policies were failing.

"With the opposition with nearly 190 seats or more, I think the difficulties with legislation, budget, and state administration will continue in the future," he said.

Analyst Kim Young-hwan of NH Investment & Securities said "expectations were inevitably weaker" for implementing Yoon's push to enhance the value of corporate stocks considered to be trading at a discount compared to global peers.

Some stocks that had rallied on optimism around the government's so-called Corporate Value-up Programme, such as financials and automakers, fell on expectations the DP will likely block any tax cuts for corporations and wealthy investors.

'RETURN OF FOES AND LAME DUCK

"Judgement" was a common theme running through comments by opposition victors, many of whom had campaigned on what they said was Yoon's mismanagement of the economy and his refusal to acknowledge his wife acted improperly when she accepted a Dior bag as gift.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

First lady Kim Keon Hee has not been seen in public since Dec. 15 and was absent when Yoon voted, reflecting the view by some analysts and opposition party members that she had become a political liability for the president and his PPP.

The election also brought the return of some of Yoon's foes, including former Justice Minister Cho Kuk leading a splinter third party, former PPP leader Lee Jun-seok who had split with Yoon in a feud, and Choo Mi-ae, who as former justice minister clashed with Yoon when he was the top prosecutor.

Yoon is, however, likely to avoid the super-majority of a two-third opposition control that could break presidential vetoes and pass constitutional amendments.

But nearing the end of the first two years of his five-year single term allowed by the constitution, Yoon was likely to slip into a lame duck status, some analysts said.

Mason Richey, a professor at Hankuk University of Foreign Studies, said Yoon might focus more on his overseas agenda including tightening security ties with the U.S. and Japan, though those plans could also be at risk if the opposition seeks to cut budgets.

"Given his likely lame duck status, the temptation for Yoon will be to focus on foreign policy where he will still have statutory power," Richey said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.