South Korean President Lee Jae Myung unveiled a major cabinet reshuffle on Sunday, naming First Vice Finance Minister Lee Hyoung-il as the new deputy prime minister and minister of economy and finance. The administration also tapped ruling Democratic Party lawmaker Kim Seung-won to lead the Ministry of Justice, and named Kang Shin-chul, former deputy commander of the South Korea-U.S. Combined Forces Command, as the new defense minister, presidential chief of staff Kang Hoon-sik said in a televised address.

The reshuffle comes as President Lee Jae Myung's administration seeks to revitalize its international policy momentum entering its second year, while analysts question the sustainability of his expansionary fiscal policies amid a rout in the local bond market. Lee Hyoung-il, a career technocrat who has held the vice finance minister position since June last year, inherits an economy running hotter than expected and will work with a central bank tightening policy as the government boosts fiscal spending.

The government is expected to roll out its 2027 budget next week. In South Korea, cabinet nominees must face strict legislative scrutiny before formal appointment, though the president retains constitutional authority to appoint ministers even if parliament votes them down.