South Korea’s new president faces fragile economy

South Korea’s new president faces a fragile economy marked by declining investment, weak consumption, and rising external trade pressures. Growth forecasts have been slashed to 0.8% for 2025, prompting monetary easing and plans for a KRW30tr (USD21.8bn) extra budget to support small businesses, infrastructure, and social programmes. The government must also navigate US-led tariffs that are hitting auto and steel exports, while negotiations aim to secure tariff relief by July. At the same time, Seoul is under pressure to revive its tech competitiveness, especially in semiconductors and AI. Economists warn that without regulatory reform and stronger industrial incentives, Korea risks losing ground to global rivals, even as fiscal and monetary tools are deployed to prevent economic stagnation.