South Korea’s Constitution Court upholds impeachment motion of President Park, national elections to take place by 9 May

South Korea’s Constitution Court unanimously approved the National Assembly’s motion to impeach President Park Geun-hye. President Park will be removed from office with immediate effect, and national elections must take place by 9 May.  In the interim, Prime Minister Hwang Kyo-ahn will stay on as the acting President.

A motion to impeach President Park was passed on 9 December 2016 by 234 votes to 56 in the National Assembly. Her duties were suspended with immediate effect and Prime Minister Hwang Kyo-ahn took over in the interim. The Court then had up to six months to make a judgment on the motion.

The Court’s approval will likely restore public confidence. The new government will be better able to come out with more forceful fiscal measures to counter the slump in consumer sentiment. South Korea’s consumer sentiment has dropped to its lowest since 2009. Over the longer term, the implementation of much-needed structural reforms remain a challenge given the fragmented political landscape.

"We reckon that a supplementary budget of around USD10bn could be introduced in Q3 to shore up consumer sentiment which has slumped to the lowest since 2009 (see chart 3). We see growth holding up at 2.9% this year from 2.8% in 2016. We expect USD-KRW to re-test 1,200 by year-end from 1,160 currently." said Commerzbank in a report.