Seoul: Saenuri Party Chairman Kim Moo Sung is resigning as its chairman, following a surprise setback for President Park Geun Hye's ruling party in Wednesday's election.

Ms Park's party has failed to win a majority in the legislature, undermining chances to enact her economic agenda in her final years in office. With almost all of the ballots counted, the Saenuri Party is projected to win 122 parliamentary seats, South Korean TV broadcaster KBS TV reports. The ruling party currently has 146 representatives in the 300-seat National Assembly, South Korea's unicameral legislature.

Kim Moo-sung, centre, chief of the ruling Saenuri Party at a campaign rally this week, before the party's electoral defeat. Credit:AP

Ms Park's hard-line stance on North Korea failed to sway voters while a slumping economy may have weighed more heavily on their minds. South Korea's youth unemployment rate hit a record in February and exports have fallen for 15 consecutive months. Park has sought to tackle the economic doldrums by boosting entrepreneurship under her "creative economy" policy.

'No Jobs'