South Korea’s Growth Is a Casualty of Its Political Impasse
Constitutional wrangling is leaving a dangerous policy vacuum. Instead of a boom, growth is struggling.
Politics is getting in the way of South Korea’s economy.
Photographer: Chung Sung-Jun/Getty Images
South Korea really ought to be doing better. Inflation is easing nicely and, as a major exporter, the nation stood to benefit from an upswing in global growth. The American economy is outperforming, and China has taken some important steps to put a floor under its subpar expansion.
Politics is getting in the way, a reminder that big economies don’t just run themselves. The protracted political stalemate that began with President Yoon Suk Yeol’s short-lived imposition of martial law last month has sapped confidence at precisely the wrong time. Prosecutors charged the impeached Yoon with insurrection, Yonhap News reported, forcing him to remain in detention. (The finance minister currently heads the government.) This fiasco, in a country famed for stability, is bleeding into the economic arena.
Unemployment jumped a full percentage point in December, which is a lot for an advanced industrial nation. Gross domestic product barely rose in the final three months of 2024. Sure, interest rates are coming down and there’s reason to hope that if Yoon is removed from office and a successor emerges, business life can get back on track.