By Cynthia Kim and Soo-hyang Choi
SEOUL (Reuters) -South Korean President Yoon Suk Yeol on Monday nominated former chief economic advisor Choi Sang-mok to be the country’s next finance minister, with the incumbent widely expected to step down to run for election.
Choi, who is replacing Choo Kyung-ho, will need to maintain economic momentum ahead of parliamentary elections next April, which will determine the legislative support level for a number of bills proposed by the government including the ministry’s proposal to restrict fiscal spending growth.
“With this (decision) Yoon is trying to make sure there is policy continuity in place ahead of election,” said Park Sang-hyun, an economist at HI Investment & Securities. “Choi has been long-time finance ministry person and he basically spearheaded major economics policies of the Yoon administration from the very beginning so its a safe choice.”
Currently, the ruling party controls only 37% in the 298-member parliament, compared with 56% or 168 seats held by the main opposition party.
The reshuffle comes as President Yoon’s approval rating has fallen for a third straight week to 32% in the last week of November from 36% in the second week, data from Gallup Korea shows.
Yoon and his ruling party will have to navigate a host of challenges in their quest to regain control of parliament in the upcoming April general election, including higher borrowing costs that have dented private consumption and added to the pressure on households grappling with elevated debt levels.
Moreover, despite the country’s restrictive policy interest rate at 3.50%, consumer inflation accelerated for a third month in October amid higher food costs, far above the Bank of Korea’s target rate of 2%.
Choi has a bachelor’s degree from the Seoul National University law school, where Yoon also studied around the same time. Choi’s career in government service has been mostly at the finance ministry, overseeing economic policy making, financial market policies, and external business relations.
Outgoing minister Choo is widely expected to run for elections in the Daegu district, a conservative stronghold in the country’s southeast where he was born.
Yoon doesn’t need parliamentary approval to appoint a new finance minister, who also serves as deputy prime minister.
(Reporting by Soo-hyang Choi; Editing by Ed Davies & Shri Navaratnam)
