After an initial surge in cases, Korea was less seriously affected by the COVID-19 virus than other countries, but the subsequent recovery was relatively mild. The negative effect was concentrated among low-income earners such as temporary, low-skilled, and small company workers, worsening income distribution. Expansionary monetary and fiscal policies contributed to an economic rebound, but the overall policy stance was not as aggressive as those in other advanced countries. While the Korean economy is expected to continue on a recovery path, downside risks are lurking, such as accumulated household debt in conjunction with ballooning apartment prices that may face some correction over the course of global monetary policy normalization. Beyond cyclical fluctuations, the COVID-19 recession will also cause structural changes that are likely to intensify bipolarization and social tensions. In this regard, establishing the leadership necessary to enable the Korean economy to cope with increasing social tensions will become the most challenging task for the next government scheduled to take office in 2022.