South Korea's Conservative Shift: A Right-Wing Election and Its Economic Implications

The 2025 South Korean presidential election has ignited fierce political competition, with conservative candidates from the ruling People Power Party (PPP) vying to reclaim power after former President Yoon Suk Yeol’s controversial impeachment. At the forefront is Kim Moon-soo, a far-right figure narrowly reinstated as the PPP’s candidate following a contentious internal coup. Meanwhile, rivals like Han Duck-soo and Oh Se-hoon threaten to splinter the conservative vote, while liberal frontrunner Lee Jae-myung leads in polls. This article explores how the election’s outcome could reshape South Korea’s economy and investment landscape.

Political Dynamics: A Fractured Conservative Base

The PPP’s internal strife has dominated headlines. Kim Moon-soo’s survival as the party’s candidate hinged on a narrow vote rejecting a last-minute attempt to replace him with Han Duck-soo, the former acting president. While Kim emphasizes “stability and unity,” his hardline stance—opposing labor rights and prioritizing corporate interests—has drawn criticism. Meanwhile, Han’s potential independent bid could fracture conservative support, benefiting Lee Jae-myung of the Democratic Party, who advocates progressive reforms like wealth redistribution and stronger labor protections.

Key Policy Priorities: A Conservative Economic Agenda

The right-wing candidates’ policies signal a clear ideological divide:
1. Anti-Worker Policies: Kim Moon-soo has openly condemned labor strikes as “illegal,” advocating punitive measures against unions to suppress strikes. This aligns with the PPP’s broader goal of curbing labor influence to protect corporate profits.
2. Pro-Business Deregulation: Han Duck-soo and Oh Se-hoon push for reduced corporate taxes and deregulation, favoring chaebol conglomerates like Samsung (005930.KS) and Hyundai (005380.KS).
3. U.S.-Centric Foreign Policy: All PPP candidates prioritize deepening ties with the U.S., emphasizing military alliances over balancing relations with China.

The KOSPI’s 8% decline since late 2024 reflects investor anxiety over political instability. A conservative win could stabilize markets, but public anger over Yoon’s legacy—marked by rising inequality—adds uncertainty.

Sector Impacts: Winners and Losers

• Chaebols: A PPP victory would likely favor large corporations, as deregulation and labor suppression boost profit margins. Samsung’s stock, for instance, has risen 15% in 2025 amid expectations of lighter regulatory scrutiny.
• Defense & Tech: Han Duck-soo’s focus on U.S. alliances could benefit defense firms like Hanwha (009200.KS), while tech giants may gain from reduced regulations.
• Consumer Goods: Progressive policies under Lee Jae-myung—such as higher minimum wages—could hurt low-margin sectors, making a conservative win more investor-friendly in the short term.

Risks: Public Backlash and Electoral Uncertainty

• Economic Inequality: South Korea’s Gini coefficient (0.35 in 2023) remains high, fueling public discontent. Conservative policies favoring corporate interests may exacerbate this divide, risking social unrest.
• Electoral Split: If the conservative vote fragments, Lee Jae-myung’s progressive reforms—like wealth taxes—could proceed unchallenged, spooking investors reliant on status-quo policies.

Conclusion: A Tight Race with High Stakes

The election’s outcome hinges on conservative unity and public sentiment. While PPP candidates trail in polls (Lee Jae-myung leads at 42%, vs. Kim’s 28% and Han’s 15%), a last-minute coalition or voter backlash against progressive policies could shift momentum.

Investors should monitor key indicators:

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A conservative win would likely bolster sectors tied to corporate profits and U.S. alliances but risks alienating a population weary of inequality. Conversely, a liberal victory might spark short-term market volatility but could address systemic economic challenges. As the June 3 election approaches, investors must weigh the balance between political stability and transformative reform.