South Korea formally splits finance ministry, nominates leader for new budget body

Kiswahili

South Korea formally divided its Ministry of Economy and Finance into two entities on January 2, 2026, following anticipation of a potentially leaderless launch. The new Ministry of Planning and Budget, under the Prime Minister's Office, now handles budget functions, with former lawmaker Lee Hye-hoon nominated as its head.

The division, part of a broader government reorganization under President Lee Jae-myung's reforms, reverses the 2008 merger and aims to improve efficiency, budget transparency, and policy execution amid economic challenges.

At the opening ceremony, Finance Minister Koo Yun-cheol emphasized achieving growth rebounds and economic leaps. Lee Hye-hoon, a former three-term conservative lawmaker, was nominated to lead the new ministry, addressing earlier concerns about a leaderless start.

While expected to streamline operations, some worry about short-term disruptions from the split.

Makala yanayohusiana

President Lee Jae-myung nominates ex-lawmaker Lee Hye-hoon as inaugural Minister of Planning and Budget at a press conference.
Picha iliyoundwa na AI

President Lee nominates ex-lawmaker Lee Hye-hoon for budget planning minister

Imeripotiwa na AI Picha iliyoundwa na AI

President Lee Jae Myung nominated former three-term conservative lawmaker Lee Hye-hoon as the inaugural minister for the new Ministry of Planning and Budget on December 28, 2025. The nominee described the economy as facing a structural crisis and short-term 'perfect storm' the next day, pledging bold budgetary investments to support livelihoods. The ministry, set to launch in January under the prime minister's office, will handle budget allocation and mid- to long-term economic strategies.

New budget office likely to launch leaderless next month

A new budget management office is likely to launch without a leader on January 2, 2026, according to government officials. The office will oversee next year's 727.9 trillion won ($494.29 billion) budget and assume key functions from the Ministry of Economy and Finance. It will operate under the Prime Minister’s Secretariat as part of President Lee Jae Myung’s reform plan.

Rival parties agree to confirmation hearing for budget minister nominee Lee Hye-hoon

Imeripotiwa na AI

South Korea's ruling Democratic Party and opposition People Power Party agreed Thursday to hold a confirmation hearing Friday for Lee Hye-hoon, President Lee Jae Myung's nominee for the new Ministry of Planning and Budget, after weeks of delays over incomplete documents and allegations against her.

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Unification minister vows to lead policy on North Korea

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South Korea and US launch North Korea policy body amid ministry feud

Ruling party, government pledge proactive fiscal policy to boost consumption

The ruling Democratic Party of Korea and the government pledged on January 7 to maintain a proactive fiscal policy this year to prop up private consumption and revive the economy. Finance Minister Koo Yun-cheol said the focus will be on supporting people's livelihoods and the self-employed through measures to boost total demand.

Finance minister pledges decisive action on FX volatility

Imeripotiwa na AI

Finance Minister Koo Yun-cheol said on Wednesday that the government will take 'decisive action' if excessive volatility hits the foreign exchange market, as the Korean won continues to weaken against the U.S. dollar. The rapid decline of the won has led the Ministry of Economy and Finance, the Bank of Korea, the National Pension Service, and the Ministry of Health and Welfare to form a joint consultation body. The group aims to create a 'new framework' balancing pension returns with FX stability.

Joint Prosecution-Police Team Launched in Unification Church Bribery Probe

Following police raids and a special counsel investigation, the prosecution and police have formed a joint team led by Kim Tae-hoon of the Seoul Southern District Prosecutors' Office to probe bribery allegations between the Unification Church and politicians from both major parties.

Lee receives briefing on balanced regional development

Imeripotiwa na AI

President Lee Jae Myung received a policy briefing on balanced regional development on Monday, December 8, stressing it as key to sustainable growth. The presidential committee presented a customized strategy to ease concentration in the Seoul metropolitan area and foster new growth drivers nationwide. The plan includes five regional hubs and three special self-governing provinces.

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