Park Chong-hoon

Stepping into 2025, South Korea stands at a crossroads, facing a precarious mix of political upheaval and economic uncertainty. Consumer confidence has nosedived, reflecting widespread apprehension about the National Assembly's impeachment of President Yoon Suk Yeol and the devastating plane crash at Muan International Airport. These events have cast a long shadow over the economic recovery. Yet, amid this turbulence, bold fiscal and monetary measures offer hope for stabilization and recovery.

The impeachment of Yoon has injected political and economic uncertainty into Korea's outlook. In December, the Korean won fell to a 25-month low, and the KOSPI index experienced heightened volatility, signaling fragility in the financial markets. Consumer sentiment has similarly suffered, dropping from 100.7 in November to 88.4 in December — a reflection of eroded public trust exacerbated by the impeachment proceedings and the controversial imposition of martial law.

The national psyche was shaken further by the Muan plane crash, which led to widespread mourning and the cancellation of year-end celebrations. Drawing parallels to the 2014 Sewol ferry disaster, private consumption — a critical driver of the economy — is likely to contract sharply, dragging 2025 growth lower. Political instability and collective grief underscore the urgent need for cohesive leadership to restore confidence.

In response to these shocks, the government has rolled out a record fiscal spending package of 330.6 billion won ($296 million), targeting small and medium-sized enterprises (SMEs), vulnerable populations and infrastructure........

© The Korea Times