Increased by 2.6% compared to the previous year due to exchange rate stabilization
Achievement of $40,000 likely to be delayed due to low growth
Annual real GDP growth rate is 1.4%
Gross national income (GNI) per capita, which had been overtaken by Taiwan for the first time in 20 years, rebounded last year and surpassed Taiwan again. However, there is an analysis that there is a long way to go to achieve the government’s goal of ‘national income of $40,000’ due to low economic growth and unstable exchange rates.
According to ‘2023 Fourth Quarter (October-December) and Annual National Income (Provisional)’ announced by the Bank of Korea on the 5th, GNI per capita last year was $33,745, an increase of 2.6% compared to the previous year. In won terms, it was 44,051,000 won, an increase of 3.7% from a year ago. GNI per capita is a figure obtained by dividing the income earned by citizens at home and abroad by the total population, and is a representative indicator of the financial situation of the people.
Korea’s GNI per capita exceeded $30,000 in 2017 ($31,734) and $35,000 for the first time in 2021 ($35,523), four years later. However, the following year, in 2022, the won-dollar exchange rate rose by an average of 12.9% per year and nominal gross domestic product (GDP) decreased by 8.1%, and GNI per capita fell by 7.4% to $32,886. That year, Korea’s GNI per capita caught up with Taiwan’s ($33,565) for the first time in 20 years.
However, last year, as the won-dollar exchange rate showed a relatively more stable trend than the Taiwan dollar exchange rate against the US dollar, GNI per capita again surpassed Taiwan’s. Choi Jeong-tae, head of the National Accounts Department at the Bank of Korea, explained, “Nominal GNI increased 3.9% year-on-year in both Korea and Taiwan, but while the won-dollar exchange rate rose 1.1%, the exchange rate between the Taiwanese dollar and the U.S. dollar rose 4.5%, which was relatively volatile.” .
Last year’s fourth quarter gross domestic product (GDP) increased by 0.6% compared to the previous quarter, which was the same as the breaking figure announced in January. However, the contribution of construction investment (-0.3 percentage points) was revised downward, while exports (0.9 percentage points), imports (0.4 percentage points), and facility investment (0.3 percentage points) were revised upward. The annual real GDP growth rate was also calculated to be 1.4%, the same as the preliminary report. The GDP contribution of the private sector (0.9 percentage points) and the government (0.4 percentage points) decreased by 1.2 percentage points and 0.1 percentage points, respectively.
There is also analysis that the timing of achieving the government’s goal of ‘national income of $40,000’ may be delayed further than the Bank of Korea expected last year. In March of last year, the Bank of Korea said, “If real GDP grows at around 2% over the next two to three years, inflation continues at around 2%, and the exchange rate remains at the 1,145 won level, which is the average of the past 10 years, GNI per capita will soon reach 40,000 won. He predicted, “We will be able to achieve the dollar.” However, last year’s growth rate (1.4%) was below expectations, and the exchange rate also remains high at the 1,300 won range.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.