The economic slowdown, if it extends well into next year, may hold sway over the results of the parliamentary and presidential elections, observers say.

The ruling Grand National Party and its presidential frontrunner Rep. Park Geun-hye are positioned to feel the chill from a cooling economy more than the opposition bloc.

Aides to Park have recently expressed concerns over the impact of the prolonged economic slump on her prospects for succeeding in her second presidential challenge. They fear deteriorating livelihoods may further aggravate public sentiment against the ruling camp, disadvantaging Park in the presidential race against opposition rivals that could include entrepreneur-turned-professor Ahn Cheol-soo, who has an enthusiastic following among younger voters.

Rep. Yoo Seong-min, a confidant of the former GNP chairwoman, called for President Lee Myung-bak to be more active in overcoming the economic difficulties during a meeting of party executives last month. Some GNP lawmakers have recalled that the 1997 foreign exchange crisis led to the defeat of conservative ruling party candidate Lee Hoi-chang to his liberal contender Kim Dae-jung in the presidential election despite his initial lead in opinion polls.

President Lee, a former construction firm CEO, paved his presidential road by highlighting his economic expertise during the 2007 campaign, winning over voters disappointed with the economic mishandling by President Roh Moo-hyun. But Lee’s economic record, now marked by rising prices, ballooning household debt and increasing rents, appears likely to weigh down Park, who lost the party’s nomination to Lee ahead of the previous presidential race.

Park has used her recent campaign activities for party candidates in the local by-elections to express her sympathy with the unemployed and underprivileged while demonstrating her expertise on a range of social and economic policies.

By Kim Kyung-ho (khkim@heraldcorp.com)