What is the impact of South Korea's new leader, Lee Jae-myung, on the country's economic landscape?

CGTN Europe interviewed Junsok Yang, Professor, Dept of Economics at the Catholic University of Korea

Transcript

00:00And Yong Sook Yong is a professor of economics from the Catholic University of Korea.

00:30And the public demanded that the government care more about growth.

00:34As you said, the new president is looking for growth.

00:37And the Bank of Korea has downgraded the 2025 growth outlook for the country to just 0.2%.

00:44So how much of this reflects the short-term political turbulence in the country versus deeper structural economic reforms and problems?

00:53The difference between the growth rate estimate that we have versus the potential growth rate,

00:59that is, I think, attributable to the short-term problems, the political turmoil that we had since the martial law and the election.

01:08So some of that should be stabilized, but also the uncertainty that we are getting from the United States,

01:15from the Trump administration dealing with tariffs mostly, but also some turbulence in the international financial markets.

01:23And speaking of tariffs, the U.S. President Donald Trump has raised steel and aluminium tariffs to 50% today.

01:31So how will that impact South Korea's export-driven economy?

01:36Because the tariffs are going up and because the prices in the U.S. fall,

01:41I think Korea will experience some decline in exports of steel and aluminium to the United States.

01:47But every other country is being hit with the same tariffs.

01:51From what we hear from the United States about steel and aluminium production,

01:57they do not have that much of a spare capacity right now,

02:01and they already have some of the highest steel prices in the world.

02:06So the damage to Korea, the reduction in exports, may not be as much as we fear,

02:12but we'll have to wait and see.

02:13And let's talk about his foreign policy.

02:15Lee is known for a more pragmatic foreign policy that is maintaining stable ties with China

02:21and a strengthening dialogue with North Korea.

02:23So do you expect this ship to affect economic relations with major partners like the U.S., Japan and China?

02:32Well, because Korea is an exporting economy, we depend so much on exports.

02:38And further, because of the, let's say, unique situation we have with North Korea,

02:43we do need to maintain balanced relationship between China, United States, Japan and Europe.

02:51We have to maintain a balanced relationship between all players

02:57if he is to not worsen the current diplomatic problems that we see in not only in economics,

03:05but in North and South Korea relationship.