Issue #1

The Week in Brief

The economic story moved this week. On May 4, in Samarkand, Uzbekistan, Bank of Korea (한국은행) Senior Deputy Governor Yoo Sang-dae told reporters it is time to consider halting rate cuts and shifting toward a hike cycle. That ends two years of easing posture and puts the May 28 Monetary Policy Board meeting, the first under new Governor Shin Hyun-song, on every watchlist. The June 3 local elections are 30 days out, with the Democratic Party of Korea leading in Seoul, Incheon, and Gwangju. Two appellate court rulings on former President Yoon Suk Yeol and Kim Keon Hee head to the Supreme Court. SK hynix crossed ₩1,000 trillion in market cap, and on May 6 the KOSPI broke 7,000 for the first time, with Samsung Electronics crossing $1 trillion in market cap on the same day. April exports came in at $85.9 billion. And two practical reminders for foreign residents: an NHIS settlement deadline on May 11, and the comprehensive income tax window now open through June 1.

The Bank of Korea just signaled rate hikes are back on the table

Bank of Korea Senior Deputy Governor Yoo Sang-dae (유상대) told reporters at the Asian Development Bank annual meeting in Samarkand, Uzbekistan, on May 4 that "it is time to consider halting rate cuts and moving toward a rate hike cycle," reported the Korea Herald and Kyunghyang Shinmun. Yoo also said the possibility of a hike signal at the next meeting "is open." That is a directional reversal after two years of easing.

Why this matters: the BoK base rate (기준금리) has stayed at 2.50% since May 2025, and a pivot to hikes changes the math on new and variable-rate mortgages, on the loans many tenants use to fund wolse (월세) deposits, and on the won/dollar rate that foreign residents watch when sending money home. Yoo's remarks are the strongest hike-direction signal from a senior BoK official in two years.

The remarks are not policy yet. The next Monetary Policy Board meeting is May 28, the first chaired by new Governor Shin Hyun-song, who took office April 21. Markets have already begun pricing in two hikes this year, with some analysts seeing the benchmark reach 3% by year-end. The won closed at 1,462.8 per dollar on May 4, recovering meaningfully from the 2026 lows reached during the late-March Hormuz disruption.

Korean primaries Hankook Ilbo and Newsis carried the same Yoo remarks. The board has not formally signaled a within-year hike before this. May 28 is when the signal becomes, or doesn't become, policy.

Korea This Week

June 3 local elections, 30 days out: DPK leads Seoul, Incheon, Gwangju

With one month until Korea's 9th simultaneous local elections, the Democratic Party of Korea holds polling leads in Seoul, Incheon, and Gwangju, while the People Power Party contests Gyeonggi, Busan, and 14 National Assembly by-elections. In Seoul, an MBC-Korea Research International poll conducted April 28-29 (n=800 Seoul adults 18+, ±3.5pp at 95% confidence) had DPK's Chong Won-o, a former three-term Seongdong district head endorsed by President Lee, at 48% against PPP Mayor Oh Se-hoon, who is seeking a fifth term, at 32%, MBC News reported. In the Pyeongtaek-B by-election, an Incheon Ilbo-Hangil Research poll conducted May 1-2 (n=500, ±4.4pp) had DPK's Kim Yong-nam at 30.8% and Rebuilding Korea Party leader Cho Kuk at 23.0%. The semiconductor belt running through Pyeongtaek, Hwaseong, and Yongin has become a defining swing region as both parties court younger chip-industry voters, the Korea Herald reported. Local governments set housing-loan programs, multilingual education budgets, and gu-office service hours, all of which matter to the foreign-resident communities concentrated in the same belt.

Yoon Suk Yeol and Kim Keon Hee receive harsher sentences on appeal; both cases head to Supreme Court

On April 29, the Seoul High Court sentenced former President Yoon Suk Yeol to seven years for obstructing his own arrest and bypassing the constitutionally required full Cabinet meeting before he declared martial law in December 2024, increasing his five-year first-instance sentence and reversing the lower court acquittal on directing security officials to fabricate information for foreign media, Kyunghyang Shinmun and Korea Herald reported. Yoon is separately serving a life sentence for rebellion handed down in February 2026. The day before, on April 28, the same court increased former First Lady Kim Keon Hee's sentence from one year and eight months to four years on appeal, reversing the lower court acquittal on Deutsche Motors stock manipulation (joint principal liability) and confirming bribery charges tied to luxury gifts, including a Chanel bag, from a Unification Church official, per MBC News, Seoul Shinmun, and Korea Times. On May 4, both the special counsel and Kim's lawyers filed Supreme Court appeals. Two days later, on May 6, Shin Jong-oh (신종오), the Seoul High Court judge who chaired the panel that delivered Kim's four-year sentence, was found dead near the court building in Seocho-gu in the early hours of the morning, per MBC News, Seoul Shinmun, Law Times, and Korea Herald. Police said they recovered a handwritten note, that Shin is believed to have fallen from a building, and that there is no evidence of foul play; they are investigating as a suicide. His death prompted an exchange between PPP and DPK lawmakers in the National Assembly Judiciary Committee on the same day. No final police determination has been released.

SK hynix tops ₩1,000 trillion; KOSPI breaks 7,000 for the first time on May 6

SK hynix shares rose 9.56% on May 4 to ₩1.409 million, pushing market capitalization above ₩1,000 trillion for the first time, Seoul Economic Daily reported. The driver: Q1 2026 results released April 23, with revenue at ₩52.6 trillion (up 198% year-on-year) and operating profit at ₩37.6 trillion on a 72% margin, on HBM (high-bandwidth memory) demand from AI infrastructure customers, per SK hynix's own release. Major brokerages raised price targets to ₩2.0-2.1 million per share. The KOSPI gained roughly 30.6% in April, with SK hynix up 59.4% on the month and Samsung Electronics up 31.9%, per Seoul Economic Daily; it was the biggest monthly gain among major markets per the Korea Herald, and the strongest single month for the index since January 1998 per CNBC. The rally accelerated through May 5-6: the KOSPI closed at 6,936.99 on May 5 and broke 7,000 for the first time on May 6, finishing at 7,384.56 after an intraday high of 7,426.60 that briefly triggered a buy-side sidecar circuit breaker, per Hankyung and Financial News. Samsung Electronics surged 14% on May 6 to cross $1 trillion in market cap, the second Asian company after TSMC to reach that level. Samsung and SK hynix together represent more than 42% of total KOSPI market value. The pension fund and employer-linked savings plans most foreign residents are enrolled in track these moves.

April exports hit $85.9 billion, second-highest on record

Korea's April exports reached $85.89 billion, up 48% year-on-year, the second-highest monthly figure on record after March 2026's $86.6 billion, the Ministry of Trade, Industry and Energy reported on May 1, per Korea Economic Daily and Herald Business. Semiconductor exports set a monthly record at $31.9 billion, up 173% year-on-year, E-Today reported, on the same DDR4 and HBM demand driving SK hynix's quarter. The trade surplus of $23.77 billion was the largest ever for April, and Korea's consecutive trade-surplus streak reached 15 months. Computer exports rose more than six-fold to $4.1 billion.

Samsung union coalition fractures ahead of May 21 strike

On May 4, the Samsung Electronics Co. Union, known internally as Donghaeng and representing roughly 2,300 members primarily from the Device Experience (DX) division, withdrew from the joint strike coalition, the Korea Herald reported. The trigger was the coalition's bonus demand of 15% of the Device Solutions (DS) division's operating profit, which could mean about ₩700 million per chip employee while DX workers, whose division posted a 36% profit decline, would receive no separate bonus, the Korea Times reported. More than 2,500 membership withdrawals appeared on the company's internal community board over 10 days. The remaining coalition still plans an 18-day strike from May 21 to June 7, potentially affecting roughly 40,000 workers, per Financial News. DS sites in Hwaseong and Pyeongtaek and DX facilities in Suwon employ significant numbers of foreign workers on E-7 and other employment visas. On May 5-6, a Samsung shareholder action group warned of damages suits against union members if the May 21 strike causes harm to chip production, and shareholder derivative suits against management if the bonus demand is accepted, per Newspim and Munhwa Ilbo; Samsung's board chairman issued an internal memo on the same day urging both sides to resolve before May 21.

Government coordinates new round of food-price cuts on snacks, bread, and ice cream

The latest round in a months-long sequence of government-coordinated processed-food price cuts is rolling out through April and May after the Korea.kr policy brief of March 20, this time covering snacks, mass-produced bread, and ice cream. Three biscuit and candy makers cut 10 items by an average of 2.9 to 5.5%; two bread makers cut four items by 5.4 to 6%; two ice-cream makers cut eight items by 8.2 to 13.4%. Earlier rounds reduced cooking oil and ramen prices by up to 14.6%. The discounts are item-specific and category-narrow, not blanket, so read the in-store labels rather than expect to see lower prices across the aisle.

What Changed for Residents

Your April paycheck reflected the annual NHIS health-insurance settlement, with a May 11 employer deadline for installment plans. The National Health Insurance Service (국민건강보험공단) processed the 2025 settlement using NTS payroll data for the first time this year, per Weekly Hankook. About 10.35 million salaried workers, 62% of eligible workplace subscribers, owe an average of ₩220,000 in additional premiums; 3.55 million whose income fell receive an average refund of ₩115,000. Total settlement: ₩3.7 trillion, up roughly 10% from last year. If you owe and want to spread the bill across up to 12 months instead of paying lump-sum, your employer must apply for installments by May 11, the April premium deadline. Background: our NHIS guide for foreign residents and the NHIS notice.

The comprehensive income tax (종합소득세) filing window opened May 1; deadline is June 1. Anyone tax-resident in Korea who earned non-employment or multi-source income in 2025, including freelancers, sole proprietors, landlords, and people with significant dividend or interest income, must file by June 1, per the National Tax Service. Foreign tax residents present 183 days or more in 2025 are subject to worldwide-income reporting under Article 3 of the Income Tax Act; those resident under five years face a narrower reporting obligation on foreign-source income. File online through Hometax or in person at your local tax office. Background: our income tax guide for foreign residents.

K-Content

Korean cinema's place at Cannes is unusually large this year. Park Chan-wook ("Decision to Leave," "The Handmaiden") is jury president of the 79th Festival de Cannes, the first Korean and the first Asian filmmaker since Wong Kar-wai in 2006 to chair the jury, per Festival de Cannes and Munhwa Ilbo. Na Hong-jin's science-fiction thriller "Hope," with Hwang Jung-min, Zo In-sung, Jung Ho-yeon, Alicia Vikander, and Michael Fassbender, is in main Competition, Korea's first Competition entry since Park's "Decision to Leave" in 2022, the Korea Times reported. Yeon Sang-ho's "Colony" is also at Cannes in Midnight Screenings. The festival runs May 12-23.

What to Watch

• May 8. First crude tanker (the Odessa) due at Daesan Port, the first crude delivery to Korea via the Strait of Hormuz since March, per the Korea Herald.
• May 11. NHIS April premium deadline; last day for employers to apply for the annual-settlement installment plan.
• May 12-23. 79th Cannes Film Festival, with Park Chan-wook chairing the jury and Na Hong-jin's "Hope" in Competition.
• May 21. Samsung union 18-day strike scheduled to begin, running through June 7.
• May 28. Bank of Korea Monetary Policy Board meeting, the first under Governor Shin Hyun-song, watched closely after Yoo Sang-dae's hike-direction signal.

Good Reads

• Korea Herald. "June 3 local elections at a glance." A one-stop overview of the major mayoral and gubernatorial races, candidate profiles, and what each level of government decides. (link)
• Nikkei Asia. "South Korean parties target semiconductor belt ahead of election." Maps how the Pyeongtaek-Hwaseong-Yongin chip cluster has reshaped Korea's electoral geography and the younger voters both parties are courting. (link) (subscriber)
• The Diplomat. "Whether Kusong or Yongbyon, North Korea will never give up its nuclear weapons program." Regional context for the Kusong intelligence-sharing controversy, arguing the specific facility matters less than the underlying strategic reality. (link) (metered)