Per Capita GDP Likely to Remain in the $30,000 Range Last Year... Possible Rebound This Year

If economic growth proceeds as the government forecasts, this year’s per capita Gross Domestic Product (GDP) is expected to rebound. According to the Ministry of Economy and Finance, the Bank of Korea, and Statistics Korea on the 27th, the per capita GDP for 2019 is estimated at $31,791, down $1,555 from the previous year. In the economic policy direction announced last month, the government projected last year’s nominal growth rate at 1.2%. Applying this rate to the 2018 nominal GDP (?1,893.497 trillion) results in a nominal GDP of ?1,916.219 trillion for last year.

Converting this to dollars using last year’s average KRW/USD exchange rate (?1,165.65) and dividing by the projected total population by Statistics Korea (51,709,098 people) yields the estimated per capita GDP. The decline in per capita GDP is the first in four years since 2015 (-$519). It had risen to $29,242 in 2014 but fell to $28,724 the following year. However, it rebounded successfully, reaching $31,605 in 2017, marking the first time it surpassed $30,000. The following year, it increased further to $33,346.

Last year, the construction boom ended while the US-China trade conflict deepened, causing a slowdown in the global economy and resulting in export sluggishness. Consequently, the real GDP growth rate was 2.0%, the lowest in 10 years since 2009 (0.8%). This led to a negative growth in per capita GDP. However, it did not fall back below the $20,000 level.

If growth recovers as the government expects this year, per capita GDP can rebound again. Assuming the nominal growth rate of 3.4% announced last month and the same KRW/USD exchange rate as last year, this year’s per capita GDP would increase by $1,036 to $32,827.

Regarding this, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki said at the Materials, Parts, and Equipment Competitiveness Committee meeting on the 22nd, “Looking back on last year, we achieved a second-best performance in the three major indicators representing the national economy: a ‘V’-shaped rebound in employment, a shift toward improved income distribution, and maintaining a 2% growth rate.” He added, “We will do our utmost to achieve this year’s goals by confidently embracing economic recovery, spreading momentum for the rebound, and ensuring definite changes.”

This content was produced with the assistance of AI translation services.