This year, Korea’s per capita gross domestic product could surpass $40,000 on the back of booming semiconductor exports.
The Ministry of Economy and Finance, the Bank of Korea and the National Data Agency said on July 19 that Korea’s per capital GDP is estimated at $39,164 this year, a 7.6 percent rise from the previous year or an increase of $2,750.
The surge is the biggest growth margin in five years since 2021 which saw an 11.5 percent jump or a jump of $3,882.
If the won vs. dollar exchange rate is stabilized lower than 1,450 won per U.S. dollar, the nation’s per capita GDP could surpass the $40,000 barrier this year for first time.
The latest surge takes on significance since the nation has departed from a few years of stagnation.
Korea has seen ups and downs in the wake of the effects of the Covid pandemic, high prices and high interest rates since 2016 when the nation saw its per capita GDP top $30,000 for the first time.
Per capita GDP declined to $33,652 in 2020 and the figure bounced back to $37,534 in 2021, but it declined to $34,875 in 2022.
Things have changed this year. The nation is on the verge of passing through the $40,000 threshold on the back of the recovery of exports, particularly the semiconductor boom.
The government revised the economic growth forecast for this year at 12.3 percent, the highest level since 1996 when the national economy also grew at 12.3 percent. The feat is owed to the booming semiconductor industry.
Based on these growth trends, Korea is predicted to see its nominal GDP top 3,000 trillion won for the first time in history, or $2 trillion.
Whether Korea will see its per capita GDP top the $40,000 threshold will depend on the won vs. dollar exchange rate.
If the exchange rate is stabilized lower than the annual average exchange rate of about 1,456.1, the nation is likely to surpass the $40,000 barrier this year.
Even if Korea fails to top the threshold this year, the nation’s per capita GDP is expected to reach the milestone next year if its macro-economic picture plays out as the government predicts.
If the nominal growth rate stands at 4.6 percent as predicted by the government and the average won vs. dollar exchange rate of 1,487.19 won is applied, the nation is forecast to see its per capita GDP rise to $41,024 next year.
Meanwhile, despite the apparent recovery trends, Korea’s gap with its global rival Taiwan is widening.
On May 28, Taiwan’s statistics authorities revised Taiwan’s per capita GDP forecast from $44,000 to $45,610.
The revision was based on a prediction that Taiwan will see its real GDP grow at 9.64 percent. The feat is analyzed to be owed to a driving force of the structural boom of the semiconductor industry.
President Lee Visits United States and Three South American Countries
President Lee Jae-myung will make a five-nation trip this week that will take him to three South American nations for talks with their leaders, the presidential office said on July 22.
President Lee will depart on July 24 for San Francisco, where he will make a two-day visit for a meeting with the heads of global tech giants, including OpenAI Chief Executive Officer Sam Altman and Nvidia chief Jensen Huang, according to Chief Presidential Secretary for Policy Kim Yong-beom.
From July 25 through July 29, President Lee will pay a state visit to Brazil for a summit with President Luiz Inacio Lula da Silva, followed by visits to Chile and Argentina through Aug. 1 for summit talks with their leaders.
President Lee will wrap up his trip in Frankfurt, Germany, where he will hold a meeting with Korean residents there before returning home on Aug. 3, according to Cheong Wa Dae officials.
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