What’s going on here?South Korean markets closed out 2024 with a steep 9.6% drop, the most significant decline among major Asian peers, influenced by geopolitical tensions and economic challenges.What does this mean?South Korea’s financial scene was shaken in 2024 by sluggish exports and political chaos, overshadowing the positive 18.7% gain in the KOSPI index from the previous year. The government’s ‘Corporate Value-up Programme’, meant to boost governance and dividend returns, struggled against negative impacts. The Korean won fell 12.5% against the US dollar, marking its sharpest decline since the 2008 financial crisis. Adding to market jitters was the political upheaval from President Yoon Suk Yeol’s impeachment, leading to martial law and severely harming business confidence. Furthermore, a downturn in semiconductor performance critically affected the KOSPI’s movement in the third quarter.Why should I care?For markets: Cautious optimism amid rocky markets.As South Korean financial markets prepare to reopen on January 2, 2025, there is optimism for a recovery driven by upcoming economic policies. Still, caution is necessary due to the ongoing unpredictability of US tariff regulations.The bigger picture: Navigating geopolitical shifts.South Korea’s political turbulence and economic woes expose vulnerabilities, prompting global investors to keep a close eye on potential policy changes and regional collaborations that could impact the country’s economic robustness. Strategic partnerships and diplomatic engagements are essential as the nation seeks stability amidst these ongoing challenges.
Sab. Gen 4th, 2025
