South Korea's new President Lee Jae-myung begins moves to tackle economic 'crisis'

South Korean President Lee Jae-myung (Courtesy: Reuters photo)

South Korea's new President Lee Jae-myung held his first cabinet meeting on Thursday focused on devising an emergency package to address stagnating economic growth and aid households, moving swiftly to start tackling a top campaign pledge.

Lee took office on Wednesday just hours after riding a wave of anger over a brief martial law imposed by Yoon Suk Yeol to win the snap election. The attempt at military rule led to Yoon's ouster and sent shockwaves through Asia's fourth-largest economy.

In brief remarks open to the media, Lee told the carry-over cabinet left by the caretaker government that was in place following Yoon's impeachment in December that there was no time to waste in getting to work as the people were facing hardship.

Lee has so far only nominated a political ally and legislative veteran as prime minister and is racing to form a cabinet and staff his office to maintain continuity in administration.

The new leader expressed bewilderment after entering the presidential office on Wednesday, saying it was stripped of computers, printers and even pens and was quiet like "a graveyard" with government officials who had been assigned there sent back to their posts.

Lee has made economic recovery one of his top priorities and vowed to immediately unleash fiscal spending of at least 30 trillion won ($22 billion) to boost growth, which was projected by the central bank in May to be almost half of its earlier estimate this year at 0.8%, down from 1.5% in February.

Kim Min-seok, whose appointment as prime minister requires parliamentary approval, said on Wednesday the country was facing even more economic turmoil than during the Asian financial crisis of 1997, complicated by unfavourable external factors.

"Today, the economy is heading downward and stagnating, which is why I believe it's much more difficult," he told reporters.

The previous government had made little progress in trying to assuage crushing U.S. tariffs that would hit some of the country's major export-reliant industries, including autos, electronics and steel.

Lee faces what could be the most daunting set of challenges for a South Korean leader in decades, analysts said, ranging from healing a country deeply scarred by the martial law attempt to tackling unpredictable protectionist moves by the United States.

He spoke to the country's top military leader on Wednesday as his first official event.