Warnings on South Korea's Plunging Potential Growth

South Korea faces a severe political crisis following the president's failed attempt to impose martial law and incapacitate the National Assembly, leading to impeachment and potential removal from office. This political deadlock has severely impacted the economy, causing a sharp downturn and uncertainty among economic players.

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South Korea's political landscape has plunged into one of its worst crises in years following the sitting president's sudden declaration of martial law and attempt to incapacitate the National Assembly. His efforts have all failed, resulting in his impeachment by the parliament and likely removal from power before the natural end of his term.

The severe political deadlock has pushed the country's economy, already under pressure from various domestic and external challenges, deeper into a tailspin. Economic players ranging from the government and corporations to households and investors find themselves with little choice but to stand still.

This politics-induced economic crisis is set to persist for several months, regardless of whether the Constitutional Court upholds or rejects parliament's impeachment motion against the president within 180 days. This crisis comes at a particularly bad time, as the external conditions facing South Korea's trade-reliant economy are becoming increasingly unfavorable.