The immediate economic risks linked to the aftermath of President Yoon Suk Yeol’s short-lived martial law decree seem to be fading away, at least for the moment, but concerns are still deepening over how the South Korean economy is to grapple with looming challenges in the absence of solid leadership.

Not all business sectors are mired in a slump. For instance, the semiconductor sector, led by Samsung Electronics and SK hynix, has made a strong recovery this year, helping the country’s exports record on-year gains for the 14th consecutive month in November.

For Korea, which depends heavily on exports for economic growth, the much-anticipated recovery of demand for chips is certainly a welcome development.

But the stellar performance of semiconductor exports was not enough to bolster the overall economic growth rate. Major institutions including the International Monetary Fund revised down Korea’s growth rate to 2.2-2.3 percent.

The underlying reason for the negative evaluation lies in the protracted slump in domestic demand. Last month, the Finance Ministry finally removed the phrase “signs of recovery in domestic demand” from its regular economic report, marking the first such move in seven months.

The Korea Development Institute, a state-run think tank, has shared the same worry, saying that declining retail consumption limits the overall economic recovery.

According to the report released by the Bank of Korea on Tuesday, the growth of domestic companies is losing momentum. According to a survey of some 23,000 companies, average revenue in the third quarter rose 4.3 percent from a year earlier, compared with 5.3 percent on-year growth recorded in the second quarter.

In particular, manufacturing companies saw their revenue growth slow to 4.9 percent in the third quarter, down from 7.3 percent a year earlier. The BOK said demand for AI-related chips went up but the recovery in chips for PCs and smartphones was slower than expected.

Even before Yoon’s failed coup caused shock at home and abroad, experts expressed concerns about Seoul's wobbly financial market, whose performance was eclipsed by other foreign markets in Asia and elsewhere.

Bigger trade barriers in the form of higher tariffs under the incoming US administration of President-elect Donald Trump were feared to hurt Korea’s export drive.

It was inevitable that Yoon’s unexpected martial law order came as a major shock at a time when Korea’s economy was already finding it difficult to handle sluggish domestic demand and the prospect of tougher trade battles.

The main bourse Kospi and the foreign exchange market were impacted by the unprecedented move by Yoon, who was impeached by lawmakers and suspended from his duties Saturday. Markets have stabilized, but it is still worrisome that the Korean currency traded in the 1,430 won range against the US dollar, a level that is seen as too high for companies handling imports.

The Busan Chamber of Commerce and Industry released a report Tuesday saying that major importers in the port city are struggling to handle the sharp depreciation of the Korean currency, which translates into higher import costs and lower operating profits.

Experts predict that a high exchange rate in the 1,400 won range against the US dollar could continue for an extended period, as Trump's higher tariff policy is forecast to boost inflationary pressure in the US, which in turn may push the Federal Reserve to stop its rate-cutting cycle earlier than expected.

That scenario could be a negative factor for Korea. The BOK made a long-awaited policy pivot toward economic growth, cutting its key interest rate in October, the first reduction in 38 months. It opted for a surprise back-to-back rate cut in November. But the country is likely to need additional cuts in interest rates to revitalize lackluster domestic consumption.

Even though the political sector is still reeling from Yoon’s impeachment, financial policymakers must stay focused on addressing multiple risks in trade, domestic demand and the financial market.