President Lee Jae Myung shakes palms with U.S. President Donald Trump on the Gyeongju Nationwide Museum in Gyeongju, North Gyeongsang Province, Oct. 29. Courtesy of presidential workplace
Korea’s financial system was formed by main exterior shocks and coverage pivots in 2025.
After months of stalled talks, Korea and the USA agreed on a deal reducing U.S. tariffs on key Korean exports to fifteen p.c, easing stress on exporters. On the identical time, the received weakened sharply, hovering close to ranges final seen throughout the 1998 Asian monetary disaster.
The federal government additionally pushed forward with structural reforms, together with separating price range capabilities from the finance ministry and revising the Industrial Act to strengthen shareholder rights.
Monetary markets have been a examine in contrasts. The “KOSPI 4,000 period” started as buying and selling reached new heights, fueled by an AI-driven semiconductor supercycle. Nevertheless, the rally was closely concentrated in large-cap shares, leaving considerations over volatility and abroad profit-taking unresolved.
The actual financial system noticed uneven sectoral efficiency. Korea’s battery trade was compelled into restructuring as a result of a chronic world EV slowdown, whereas client items corresponding to instantaneous noodles and cosmetics posted file export development on the again of Okay-content reputation.
In the meantime, a string of main knowledge breaches at telecoms, bank card companies and e-commerce platforms uncovered severe weaknesses in company cybersecurity.
Listed here are 10 pivotal moments that formed Korea’s financial panorama in 2025.
Korea, US seal tariff deal after months of stalled talks
Korea’s commerce ministry spent a lot of this yr coping with the fallout from Washington’s “reciprocal” tariffs, however the yr is ending with a breakthrough in long-running negotiations that eased the worst fears of home exporters.
After the Trump administration imposed “reciprocal” tariffs of as much as 25 p.c in early April, Seoul and Washington launched talks, however progress stalled amid political uncertainty surrounding Korea’s June presidential election.
The discuss quickly picked up tempo as President Lee Jae Myung’s administration appointed new ministers, culminating in a preliminary commerce settlement on July 30. Below the brand new framework, the U.S. agreed to chop tariffs on cars, elements and different key exports to fifteen p.c, whereas Korea pledged a $350 billion funding bundle in U.S. property and associated commitments.
This month, the U.S. has formally applied a Korea–U.S. commerce deal by posting a Federal Register discover to chop tariffs on Korean items to fifteen p.c, retroactive to Nov. 1.
Since reaching the preliminary settlement, the 2 nation’s officers have been ironing out detailed phrases, together with non-tariff points corresponding to digital commerce guidelines and Korea’s nuclear-powered submarine program.
The KOSPI index is displayed on a display at Hana Financial institution’s headquarters dealing room in Seoul, Oct. 27, after the benchmark crossed the 4,000 mark for the primary time. Yonhap
KOSPI 4,000 period and market rally
The KOSPI broke above 4,000 factors for the primary time in October, reaching a historic excessive, 45 years after its launch in 1980. After beginning the yr round 2,400, the benchmark index surged greater than 60 p.c in simply 10 months. This fueled optimism, as forecasts for 2026 set the decrease band at 3,500 to 4,000 and the higher band at 4,500 to five,500.
The rally was pushed by a semiconductor supercycle linked to the unreal intelligence (AI) increase, alongside heavy overseas inflows into market heavyweights corresponding to Samsung Electronics and SK hynix. Expectations of easing the long-standing “Korea low cost,” supported by the brand new authorities’s push for capital market reforms and shareholder-friendly insurance policies, additionally performed a key function.
Nevertheless, considerations persist that features have been concentrated in massive companies and blue-chip shares, widening the hole between headline index efficiency and broader market sentiment. Alongside hopes for a “KOSPI 5,000 period,” traders stay cautious of heightened volatility and the danger of overseas profit-taking.
Harold Rogers, interim chief govt officer of Coupang, attends a parliamentary listening to on the corporate’s knowledge breach on the Nationwide Meeting in Seoul, Dec. 17. Yonhap
Main knowledge breaches places Korea’s company cybersecurity on blast
Information breaches have grow to be considered one of this yr’s key phrases because of a collection of large-scale hacking incidents at main firms in Korea, together with SK Telecom, KT, Lotte Card and Coupang, elevating main considerations over company knowledge safety.
Telecom big SK Telecom reported in April that the private info of practically 23 million customers had been compromised, together with customers’ telephone numbers and common subscriber identification module (USIM) knowledge. The breach resulted in a fantastic of 134.8 billion received ($96.9 million) by the federal government, and the corporate spending a further 1 trillion received on buyer compensation measures.
KT, in the meantime, noticed cellular cost fraud from hackers breaching its customers’ telephones utilizing an unlawful transportable base station, compromising the private knowledge of about 22,227 prospects.
Lotte Card confronted renewed scrutiny after investigators discovered that cost knowledge from greater than 2.97 million individuals had been leaked, together with card numbers, expiration dates and safety codes.
E-commerce big Coupang skilled the largest-scale incident of the yr, affecting its 33.7 million customers with the theft of data together with names, telephone numbers, e-mail addresses, supply addresses and order histories by a former worker. The continued case, which surfaced final month, rattled the federal government into warning that strategies as extreme as a suspension of Coupang’s home operations stays on the desk as regulators probe the corporate’s response and weigh attainable sanctions.
The revised Industrial Act is handed throughout a plenary session of the Nationwide Meeting in Seoul, July 3. Korea Occasions picture by Jeong Da-bin
Industrial Act revision
The revised Industrial Act, handed in July and August, expanded administrators’ fiduciary duties from their firm alone to each the corporate and its shareholders, explicitly requiring administrators to guard the pursuits of all shareholders. The change is seen as laying an institutional basis for higher consideration of minority shareholder pursuits in administration decision-making.
For listed firms, guidelines governing the appointment and dismissal of audit committee members have been strengthened, curbing the affect of controlling shareholders. The introduction of digital shareholder conferences additionally allows distant voting, which is anticipated to spice up participation by home and abroad traders and improve company governance transparency.
From a company perspective, the revisions enhance the necessity to handle compliance and governance dangers, as administrators’ liabilities are strengthened and minority shareholder rights expanded. From a capital market standpoint, these shareholder-friendly reforms are extensively anticipated to help long-term company worth rerating and appeal to higher overseas funding.
The won-dollar trade charge is displayed on a display at Woori Financial institution’s headquarters dealing room in Seoul, Dec. 23. Yonhap
Excessive trade charges
The won-dollar trade charge surged previous 1,480 received per greenback intraday in December, nearing its lowest worth since March 1998 throughout the Asian monetary disaster, when it reached 1,488.87 received. With ranges above 1,470 received turning into more and more routine, some consultants even level to the potential of the speed surpassing 1,500 received.
Past U.S. financial coverage, key components embody rising abroad funding by home traders and an increase in outbound overseas direct funding by Korean firms. These dynamics have elevated the probability that the forex will settle at elevated ranges for an prolonged interval moderately than rebounding sharply as previously.
A protracted interval of excessive trade charges might push up import costs and power prices, weighing on home demand and actual incomes whereas including inflationary stress. Consequently, policymakers are being urged to maneuver past short-term market intervention and concentrate on strengthening development engines, enhancing industrial competitiveness and bettering the construction of the present account via broader real-economy reforms.
SK hynix’s high-bandwidth reminiscence 3E / Courtesy of SK hynix
HBM emerges as new battleground as AI chip race heats up
Synthetic intelligence (AI)-centric demand has turned high-bandwidth reminiscence (HBM) into the frontline of a brand new semiconductor energy battle. Homegrown chipmakers, led by SK hynix and Samsung Electronics, have emerged as main gamers as demand for AI accelerators surged, supplying superior HBM merchandise to world tech giants corresponding to Nvidia.
SK hynix consolidated its place because the main HBM provider by being first to develop HBM4 in September and is presently supplying Nvidia with paid manufacturing samples. The corporate has additionally been the main provider of HBM3E to Nvidia all year long, resulting in file performances for 3 consecutive quarters.
Samsung, the world’s largest chipmaker, scrambled to shut the hole after ceding the second HBM provider title to Micron Expertise within the first half of the yr, ramping up shipments for its 12‑layered HBM3E merchandise. It not too long ago acquired robust evaluations for its HBM4 samples from Nvidia.
Nvidia’s pending approval to renew H200 graphic processing unit (GPU) exports to China, every geared up with six HBM3E stacks, is anticipated to additional maintain demand for legacy HBM3E and broaden the general market, whilst demand for HBM4 ramps up. Nevertheless, it comes amid heightened U.S.–China tensions, with Washington’s conditional green-light and Beijing’s nonetheless‑unsure import approval highlighting the rising concern of geopolitical danger.
Monetary Companies Fee Chairman Lee Eog-weon delivers a congratulatory tackle on the launch ceremony of the Nationwide Progress Fund on the Korea Growth Financial institution in Seoul, Dec. 11. Yonhap
Nationwide Progress Fund
The federal government has rolled out the Nationwide Progress Fund, committing 150 trillion received ($101 billion) over 5 years to superior industries. Of that complete, greater than 30 trillion received is about to be allotted subsequent yr alone to strategic sectors corresponding to AI and semiconductors.
By sector, the deliberate distribution consists of about 6 trillion received for AI, 4.2 trillion received for semiconductors and round 3 trillion received for future autos and mobility, reflecting a technique to pay attention capital on high-growth areas.
The fund is anticipated to function a coverage finance platform that offsets weakened non-public funding amid a excessive trade charge and excessive rate of interest atmosphere, whereas supporting efforts to safe a technological edge in AI and semiconductors and foster new industrial ecosystems.
Members of the Monetary Supervisory Service’s (FSS) labor union and workers protest a authorities reorganization plan on the FSS headquarters in Seoul, Sept. 9. Yonhap
Separation of finance ministry
Below the Lee Jae Myung administration’s authorities reorganization plan, budgetary capabilities shall be separated from the Ministry of Financial system and Finance beginning Jan. 2.
A brand new price range authority shall be established underneath the Prime Minister’s Workplace, taking cost of price range formulation and allocation and financial coverage administration, whereas the finance ministry will retain duty for taxation in addition to financial and monetary coverage.
In discussions on broader authorities restructuring, reforms have been additionally thought of for the Monetary Companies Fee and the Monetary Supervisory Service. Nevertheless, after assembly robust opposition and requires additional deliberation, the federal government determined to first proceed with the bigger framework of reform, together with the cut up of the finance ministry, whereas leaving adjustments to the FSC-FSS construction as a follow-up activity.
A mannequin electrical automobile chassis that includes the 46-series battery by LG Vitality Resolution is displayed on the firm’s sales space on the InterBattery 2025 on the COEX exhibition corridor in Seoul, March 5. Yonhap
Extended EV slowdown forces battery sector into restructuring
The extended Electrical automobile (EV) chasm — a slowdown in client adoption — in world demand has begun to exert severe stress on Korea’s battery trade, which has been going through sharply decrease utilization charges and contracting gross sales amid sustained weak EV adoption.
Slowing demand in the USA and Europe, coupled with intensifying worth competitors led by Chinese language carmakers, has led native main firms, together with LG Vitality Resolution, Samsung SDI and SK On, to reply with manufacturing cuts, delayed funding plans and a sharper concentrate on profitability over quantity development.
LG Vitality Resolution’s common plant utilization fell to only 51.3 p.c within the first half of this yr from 73.6 p.c in 2022, whereas Samsung SDI’s small-battery operations dipped to 44 p.c.
Battery makers are shifting from joint ventures with automakers to wholly owned vegetation, particularly in North America. SK On’s break with Ford and LG Vitality Resolution’s takeover of Basic Motors’ stake of their third U.S. plant spotlight strikes to chop again on inefficiencies whereas tightening management over strategic property.
On the identical time, three makers are redirecting traces towards power storage techniques and lithium iron phosphate battery merchandise, betting that grid-scale ESS will provide regular subsidy‑impartial development than the unstable EV market.
Nongshim Shin Ramyun instantaneous noodles are displayed at a grocery store in Seoul, Oct. 28. Yonhap
Korean client items surge globally
Korean client items from meals to cosmetics showcased exceptional momentum within the world market this yr, particularly with the continued success of hit Okay-content collection boosting publicity amongst abroad customers.
Exports of Okay-food, together with merchandise from the agricultural trade corresponding to good farms and pet meals, reached $11.24 billion {dollars} from January to October, up 5.7 p.c from a yr earlier, marking one other file for the agri-food industries.
Shipments alone totaled $8.59 billion, supported by robust gross sales of instantaneous ramen noodles, ready-to-eat rice dishes and drinks.
Instantaneous noodles and processed rice-based meals corresponding to frozen kimbap and tteokbokki logged a few of the quickest development, with rice-based product exports leaping 41.4 p.c within the first half, with gross sales to Europe surging greater than 40 p.c and 30 p.c to the Center East.
Stirred by the smash-hit animation “KPop Demon Hunters,” Nongshim’s gross sales climbed 1.9 p.c within the January–September interval to achieve 2.63 trillion received, pushed by its flagship Shin Ramyun instantaneous noodles.
Okay-beauty additionally delivered a file efficiency, with this yr’s complete cosmetics exports already topping $10.3 billion in November, with expectations of a brand new excessive determine amid strong demand from the U.S., Europe, Japan and Southeast Asia. December exports alone rose 18.4 p.c year-on-year.
