韩国总统选举：对经济、利率和外汇的影响

Issuer of report:The Hongkong and ShanghaiBanking Corporation LimitedView HSBC Global Research at:https://www.research.hsbc.comListen to our insightsFind out moreHSBC Global Research PodcastsJin ChoiEconomist, Korea & TaiwanThe Hongkong and Shanghai Banking Corporation Limitedjin.h.j.choi@hsbc.com.hk+852 2996 6597Duncan TanAPAC Rates StrategistThe Hongkong and Shanghai Banking CorporationLimited, Singapore Branchduncan.tan@hsbc.com.sg+65 6658 7255Joey ChewHead of Asia FX ResearchThe Hongkong and ShanghaiBanking CorporationLimited, Singapore Branchjoey.s.chew@hsbc.com.sg+65 6658 5186Multi-AssetKorea ◆◆◆ The3 Juneelection markstheend of a period ofpolitical turmoilLee Jae-myungelectedas Korea’s 21stpresidentTheNational Election Commissionformally declaredLee Jae-myung of the main oppositionDemocratic Party of Korea (DPK)as the winner atc1:30am HKTon 4 June.◆With93.8% of total votes counted, he gained48.8% ofthevotes,beating Kim Moon-soo ofthePeople Power Party (PPP;42.1%) and Lee Jun-seok of the Reform Party (8.0%).◆This islargely in line withtheearlier exit poll results, which came outimmediately after thevoting ended at 8:00pm HKT on 3 June(Chart 1).◆The resultisalsoin line with market expectations, withleading prediction marketPolymarketputtingthechancesof Lee Jae-myung winningat higher than 95%.The electiontook placeafterthe formal impeachment of the former president Yoon Suk Yeol on4 April,withthe Constitution requiring an election within 60 days.President-electLee(hereafterPresident Lee)willassume office fromthis morning(4 June)without the usualtwo-monthtransition period.Chart 1:The presidential election result:exit pollsChart 2:Breakdown ofseats intheNational AssemblySource:Yonhap News Agency, HSBC; Note: exit polls were jointly conducted byKBS-MBC-SBS, Korea’s three major national broadcasters; thebroadcasterssubsequently announced Lee Jae-myung’s election to be“certain”at c10:40pm HKTon 3 June, with c40% of votes countedSource:National Assembly, HSBC; Note: as of3June; values in parentheses referto number of seats; *includes Rebuilding Korea Party (12) and three other parties;**National Assembly Speaker (from DPK) and one lawmaker who has historicallyaligned with DPKWiththeelection resultsbecomingall but certain, President Lee promised five things tothenation during his speech to his supporters overnight. Specifically, he will seek:1)overcomingthe martial law crisis and restoring democracy;2)reviving economy and improving people’slivelihoods;3)protecting people’s lives and security;4)achievingpeaceful and stable inter-Korean relations; and5)improving national cohesion (Financial News, 4 June). 2Jin ChoiEconomist, Korea & TaiwanThe Hongkong and ShanghaiBanking Corporation Limitedjin.h.j.choi@hsbc.com.hk+852 2996 6597 Economics: Buckle up for a swift shift in policy directionWe think theresult of thepresidential election materially reshapes Korea’s political landscape.The DPK and other liberal partiestogethercurrentlycontrol188seatsof the 300 seatsin theNational Assembly (Chart 2),which will make it easy topass legislationandfast-tracklegislative proposals. In other words,PresidentLeeis likely toenjoyanunprecedentedlevel ofcongressional support fromthe onset of his presidency–andpossibly for the next three years.In our previewof the election, we summarised the policy agenda ofLee Jae-myung and the DPK,and how it differed fromthat of thePPP (seeKorea election preview:Look out for a swift shift infiscal policy, 28 May).We expect thenew administrationtotakea more proactive stance on fiscalpolicy (more below; alsoseetherelated discussion in theRatessection),andamore balancedapproachtoforeign affairs andthe ongoingKR-USbilateral tradenegotiations (see theFXsection). We alsoexpect the administration totakea“stick approach”(rather than carrot)in orderto address corporate governance issues and tacklethe “Koreandiscount,”which may proveaneffective strategy(seeour equitystrategists’discussion in“The Flying Dutchman:Korea: A newtake on corporate governance”, 4 June).Fiscal policy to turn more expansionary;expectasizablesecondsupplementary budgetThe DPK officially confirmedlast weekthat the new policy pledges could cost cKRW210trn overthe next five years (Yonhap News Agency, 28 May). If equally divided across five years, thiscouldimplyaddingup to c1.6%ofGDP toannualgovernment expenditure.We believesome of the proposedinitiatives, includingsupport forAI and other energy-relatedinfrastructure programs, could be conducive to growth and lead to increased tax revenues overthe coming years. However,we expect fiscal policy to turn more expansionaryfor a number ofreasons, including:1)some ofPresident Lee’s commentson thecampaigntrail;2)thelackofdetail about the financing of the new policies;3)the DPK’s previous affinity fortaking amoreproactive role in fiscal policy; and4)the weak revenue momentum amidstslowereconomicgrowth (Chart 3).We will get more clarity when the Lee administration submits its 2026 budgetproposal