South Korea's new president, Yoon Suk-yeol, will face two major problems as soon as he takes over on Tuesday, a belligerent North Korea testing new weapons and inflation threatening to undermine an economic recovery from two years of COVID-19 gloom.

Yoon, 61, won a tight election in March as the standard bearer of the main conservative People Power Party, less than a year after entering politics after a 26-year career as a prosecutor.

He will be sworn in early on Tuesday at a ceremony in front of parliament in Seoul.

Yoon won the election on a platform of fighting corruption and creating a more level economic playing field, amid deepening public frustration with inequality and housing prices, as well as simmering gender and generational rivalry.

South Korea's inflation hit a more than 13-year high last month as Russia's invasion of Ukraine sent commodity prices soaring, boosting expectations of more central bank interest rate rises, which could threaten growth prospects.

Yoon could find himself at the centre of international uproar over North Korea within days if it carries out its first nuclear test in five years, as U.S. and South Korean officials suspect it might.

North Korea put its weapons tests back on top of the agenda when it broke a 2017 moratorium on long-range missile testing in March.

Yoon has vowed to strengthen the deterrent capability of the staunch U.S. ally as it confronts the North's evolving threats, while seeking a reset of relations with China. Both issues will likely dominate his first summit with U.S. President Joe Biden this month.

Yoon formally assumed his duties at midnight on Monday with a bell-tolling ceremony at Bosingak Pavilion in downtown Seoul.

The inauguration will be held on the front lawn of parliament, attended by some 40,000 people.

Three hundred foreign guests will include Chinese Vice President Wang Qishan, Japanese Foreign Minister Yoshimasa Hayashi, and Douglas Emhoff, the husband of U.S. Vice President Kamala Harris.

The inauguration has been given the slogan "Again, Republic of Korea! A new country of the people" which reflects Yoon's commitment to the people and to resolving regional, class and generational divisions and fostering unity, his team said.

After the inauguration, Yoon will begin work at a new office at a former defence ministry building inside a sprawling compound.

He has moved the presidential office and residence from the traditional Blue House under a plan, that is estimated will end up costing $40 million, criticised by outgoing President Moon Jae-in as rushed and a national security risk.