SEOUL: South Korea has named First Vice Finance Minister Lee Hyoung-il as the country’s new deputy prime minister and minister of economy and finance as part of a major cabinet reshuffle announced Sunday.
Presidential chief of staff Kang Hoon-sik announced the changes in a televised address, saying the administration had also nominated ruling Democratic Party lawmaker Kim Seung-won as justice minister and former deputy commander of the South Korea-US Combined Forces Command Kang Shin-chul as defense minister.
Lee Hyoung-il, a career technocrat who has served as first vice finance minister since June 2025, will take charge of economic policy as the government prepares to unveil its 2027 budget.
Economy faces policy challenges
Lee takes over as South Korea’s economy is running hotter than previously expected, while the central bank has begun tightening monetary policy.
The government is also expected to increase fiscal spending in the coming year, putting the new finance minister at the centre of efforts to balance economic growth, fiscal policy and financial-market stability.
The cabinet changes come as President Lee Jae Myung’s administration enters its second year and seeks to strengthen its international policy momentum.
Analysts have questioned the sustainability of the government’s expansionary fiscal policies following a sharp sell-off in the domestic bond market.
The new finance minister will also have to coordinate economic policy with the Bank of Korea as monetary policy moves in a tighter direction.
Nominees face parliamentary scrutiny
Under South Korean law, cabinet nominees must undergo legislative scrutiny before they can formally take office.
However, the president retains the constitutional authority to appoint ministers even if parliament votes against their nominations.
The reshuffle gives the administration new leadership at the finance, justice and defence ministries as it enters its second year in office.