South Korea Marks One Year of Lee Jae Myung Presidency

President Lee Jae Myung is set to mark one year in office this week as his administration prioritizes reviving economic growth and supporting the capital market. The benchmark Korea Composite Stock Price Index reached 8,000 points this month, up from roughly 2,680 points a year earlier, fueled by semiconductor exports and government measures to boost shareholder returns.

The Bank of Korea kept its key interest rate at 2.5 percent last week but signaled a possible shift toward tighter policy to address rising inflation. The central bank raised its 2026 growth forecast to 2.6 percent from 2.0 percent in February, citing strong semiconductor shipments and a supplementary budget, while lifting its inflation projection to 2.7 percent from 2.2 percent.

Transit through the Strait of Hormuz stands at about 10 percent of pre-conflict levels, with full recovery expected to take considerable time due to mine clearance, safety, and insurance issues.

Industrial output fell 0.6 percent month-on-month in April, with retail sales and facility investment also declining amid uncertainties tied to the Middle East situation. Apartment prices in Seoul rose 0.28 percent in the second week of May, the fastest weekly gain since late January, prompting the government to plan delivery of 90,000 rental units for young residents in the greater Seoul area by 2027.

The administration implemented the yellow envelope act in March, extending bargaining rights to subcontracted workers and limiting corporate damage claims against unions. Labor organizations welcomed the measure, while business groups expressed concern that it could intensify labor-management disputes.

“Oil supply disruptions have sharply driven up gasoline and diesel prices. Shortages of such raw materials as naphtha and urea are posing a threat to a wide range of people's livelihoods.”