South Korean election setback deals severe blow to President Park Geun-hye’s economic reform agenda

South Korean voters handed President Park Geun-hye a stunning political setback by denying her conservative party a majority in the next National Assembly, poll results showed on Thursday.

The outcome, which came as a surprise to many, will likely threaten Park’s plans to push ahead with controversial economic reforms, including plans to make it easier for companies to lay off workers, and blow open next year’s presidential race. The emergence of a new centre-left party also ensures further changes to South Korea’s political landscape, which had long been shaped by two-party dynamics.

Prior to Wednesday’s parliamentary election, pollsters had predicted that the ruling Saenuri Party would crush a divided opposition and raise its expectations to take the presidency in 2017, after Park’s single term expires.

But with 99.9 per cent of the votes counted as of Thursday morning, Saenuri wasn’t even the party with the largest number of seats, let alone a majority in the 300-seat assembly.

Saenuri managed to win 122 seats, one less than the main opposition Minjoo Party, which trounced its rival in the capital Seoul and the neighbouring metropolitan area, where the two largest parties competed most fiercely.

The People’s Party, a new party created mostly by those who left Minjoo, including its former co-chairman and potential presidential candidate Ahn Cheol-soo, won 38 seats after dominating Minjoo in its traditional strongholds in the southwest Jeolla regions.

Saenuri could possibly overtake Minjoo as the largest party in the next assembly if it manages to lure back some of its former lawmakers who left and ran successfully as independents. They left Saenuri after being denied nominations amid a rift between the party’s dominant faction loyal to Park and reformists, which analysts say damaged the party’s appeal to voters.