Political turmoil is impacting the economy! South Korea's unemployment rate is skyrocketing, and the central bank is likely to cut interest rates for the third consecutive time.

It is noted that due to the decrease in job positions, the unemployment rate in South Korea has risen to the highest level in over three years, further proving the impact of the martial law controversy and the fatal plane crash on the South Korean economy. Data released by the South Korean National Statistics Office on Wednesday showed that the seasonally adjusted unemployment rate jumped from 2.7% last month to 3.7% in December, reaching the highest level since June 2021. Additionally, South Korea saw a decrease of 52,000 job positions compared to the same period last year, marking the first contraction since February 2021. Amid worsening job market conditions, consumer and business confidence experienced the largest decline since the outbreak of the COVID-19 pandemic. On December 3rd, the brief martial law imposed by President Yoon Suk-yeol shook the hearts of South Koreans, leading to a stock market crash and putting pressure on the South Korean won. The won was already the worst-performing currency in Asia last year. Yoon Suk-yeol faces arrest warrants on charges of rebellion, and the Constitutional Court is reviewing the impeachment motion passed by the parliament. As Trump is set to return to the White House with a tariff plan, the South Korean central bank cited political instability as a reason for unexpectedly lowering the benchmark interest rate for the second time in November, adding resistance to South Korea's trade-dependent economy. At the end of December last year, a Jeju Air passenger plane crashed at a southwest airport in South Korea, resulting in the death of 179 people on board, further exacerbating people's pessimism about the economy. This was the deadliest air crash in South Korean history. The South Korean central bank is scheduled to hold a meeting on Thursday to make the first interest rate decision of the year. Most economists predict that the central bank will cut interest rates for the third consecutive time, as policymakers are more focused on strengthening economic growth momentum.