[News Today] ECONOMIC IMPACT OF IMPEACHMENT

[LEAD]
The impeachment motion's approval has sparked cautious optimism for easing political uncertainties and stabilizing financial markets. However, the impeachment proceedings continue and the onset of Trump's second term still casts uncertainty internationally. This has prompted the government to urgently focus on economic stabilization.

[REPORT]
The day after the impeachment resolution was passed by the National Assembly, a government meeting on economic affairs was convened.

It focused on easing anxiety stemming from the martial law incident and the president's impeachment.

Choi Sang-mok / Deputy Prime Minister for Economy
Our economy has been put to the test again. We will deploy all resources to stabilize it as much as possible.

On the first Monday after the impeachment vote failed on Dec. 7, the Korean stock market lost steam, and the Korean won's value plunged.

But now, passing the impeachment motion is expected to reduce uncertainty about the political vacuum in the short term.

Park Sang-hyun/ iM Securities
Big uncertainties have been resolved to some extent. The U.S. stock market rally is expected to have a positive impact on the Korean stock market.

However, the current external environment is profoundly different from the previous two presidential impeachments. Back then, the Korean economy was able to avert stagnation thanks to robust trade with China and the semiconductor boom.

But this time, it is faced with sluggish domestic demand and a slowdown in export growth.

To make matters worse, the incoming Trump administration has warned of strong protective trade measures.

With consumption, investment and exports struggling, pundits say the only hope lies in fiscal and monetary policies.

Joo Won / Hyundai Economic Research Inst.
Weak exports, domestic demand risk a sharp growth drop. The govt’s fiscal policies, BOK's monetary policies should be switched to economic stimulation.

The government has vowed to work more closely with the National Assembly. It remains to be seen what stance financial authorities will issue on the main opposition party leader's supplementary budget proposal.