South Korea names veteran technocrat Lee Hyoung-il as new finance chief in cabinet reshuffle

South Korea has made significant changes to its cabinet on Sunday, with First Vice Finance Minister Lee Hyoung-il being appointed as the new deputy prime minister and minister of economy and finance. The administration also chose Kim Seung-won, a member of the ruling Democratic Party, to lead the Ministry of Justice, and Kang Shin-chul, a former deputy commander of the South Korea-U.S.

Combined Forces Command, to take on the role of defense minister. President Lee Jae Myung's administration is aiming to boost its international policy efforts as it enters its second year, but analysts are raising concerns about the sustainability of the government's expansionary fiscal policies, particularly in light of a decline in the local bond market.

Lee Hyoung-il, a seasoned technocrat who has served as the vice finance minister since last June, will now manage an economy that is performing better than anticipated, while working with a central bank that is tightening its monetary policy measures. The government is expected to present its 2027 budget next week. In South Korea, cabinet nominees undergo rigorous legislative scrutiny before the president can officially appoint them, despite the president retaining ultimate constitutional authority over ministerial appointments, even if parliament rejects them.