By Joyce Lee
SEOUL, June 3 (Reuters) - South Korea's ruling Democratic Party is projected to make sweeping gains in local elections on Wednesday, an exit poll showed, but a close race in the key city of Busan left it unclear whether President Lee Jae Myung's party could claim a landslide victory.
Voting had largely closed in the first nationwide ballot since Lee's snap presidential election victory last year.
Voters were choosing mayors and governors in 16 cities and provinces in a contest widely seen as an assessment of Lee's first year in office, and a test of whether the conservative People Power Party can recover from the fallout of former President Yoon Suk Yeol's failed martial law bid in 2024.
An exit poll by South Korea's three major broadcasters put the Democratic Party ahead in 11 of the 16 major mayoral and gubernatorial races, with the People Power Party leading in one, and four contests too close to call.
The Democratic Party candidate was projected to win Seoul, the country's capital and biggest political prize, while the party was also ahead in Gyeonggi province and Incheon, the two other major constituencies in the greater Seoul area.
But Busan, South Korea's second-largest city and a conservative stronghold, was rated too close to call, with the Democratic and People Power Party candidates in a tight race, the exit poll showed.
Polls before the election showed Lee had scored high marks for a pragmatic focus on pocketbook issues, corporate governance reforms and a stock rally that has pushed the benchmark KOSPI to repeated records, while government spending has helped offset high energy prices, analysts say.
Critics, however, say his administration has struggled to contain housing pressures and accuse him of using the courts and parliament to shield himself and allies from criminal cases.
A decisive Democratic Party victory would strengthen Lee's mandate to continue pro-market, activist fiscal policies and his conciliatory diplomatic posture towards North Korea, though analysts do not expect big policy changes after the vote.
Parliamentary by-elections were also held alongside the local contests.
In a closely watched race in Pyeongtaek, south of Seoul, Rebuilding Korea Party leader Cho Kuk and the People Power Party and Democratic Party candidates were in a three-way contest, according to the exit poll.
In Busan's Buk-A district, Democratic candidate Ha Jung-woo was projected to have 42.6% of votes against independent Han Dong-hoon, a former People Power Party leader, at 41.6%, putting the race within the margin of error.
Lee's party already controls the presidency and parliament. A strong showing on Wednesday would give the Democratic Party its greatest concentration of political power since 2020.
The People Power Party currently controls 12 of the 16 local governments.
Official results are likely to be announced early Thursday.
(Reporting by Joyce Lee, Brenda Goh and Kyu-seok ShimEditing by Ed Davies and Lincoln Feast)
