South Korea Reshuffles Cabinet, Names Veteran Technocrat as Finance Chief

South Korea's presidential office announced a significant cabinet reshuffle on Sunday, appointing First Vice Finance Minister Lee Hyoung-il as the new deputy prime minister and minister of economy and finance. The announcement was made by presidential chief of staff Kang Hoon-sik in a televised address.

The administration also named Kim Seung-won, a ruling Democratic Party lawmaker, to lead the Ministry of Justice. Kang Shin-chul, a former deputy commander of the South Korea-U.S. Combined Forces Command, has been tapped as the new defense minister.

The reshuffle comes as President Lee Jae Myung's administration enters its second year and seeks to revitalize its international policy momentum. The move also follows questions from analysts about the sustainability of the government's expansionary fiscal policies amid recent turbulence in the local bond market.

Lee Hyoung-il, who has served as vice finance minister since June last year, takes over an economy that has been running hotter than expected. He will work alongside a central bank that has shifted toward tightening policy, even as the government is expected to increase fiscal spending in the coming year.

The government is slated to unveil its 2027 budget next week.

Under South Korean law, cabinet nominees must undergo strict legislative scrutiny before formal appointment by the president. However, the president retains ultimate constitutional authority to appoint ministers even if parliament votes against them.