Despite COVID-19, South Korea's Economy Ranks 10th Globally... Per Capita GDP Surpasses Italy

IMF Raises South Korea's 2021 Growth Rate to 3.6%
South Korea's Per Capita GDP Surpasses Italy for the First Time

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Last year, South Korea's economic size ranked 10th in the world, rising two places from the previous year. Additionally, the country's per capita Gross Domestic Product (GDP) surpassed Italy for the first time.

On the 7th, the Ministry of Economy and Finance stated, "South Korea effectively and swiftly responded to the COVID-19 pandemic last year, minimizing the economic shock." South Korea's economic ranking had dropped to 12th last year but recovered to the top 10 within a year. From 2015 to 2017, it maintained 11th place before rising one step to 10th in 2018.

South Korea's per capita GDP also surpassed Italy for the first time. South Korea's per capita GDP was recorded at $31,497, exceeding Italy's $31,288 for the first time.

Earlier, the IMF raised South Korea's economic growth forecast for this year by 0.5 percentage points from January to 3.6%. The IMF's growth forecast for South Korea this year is higher than those of major institutions such as the Organisation for Economic Co-operation and Development (OECD, 3.3%), the Bank of Korea (3.0%), the Korea Development Institute (KDI, 3.1%), as well as the South Korean government (3.2%).

The Ministry of Economy and Finance emphasized, "Our economy will be one of the leading groups to recover the fastest and strongest from the COVID-19 crisis." In fact, the IMF identified eight countries, including South Korea, among the G20 nations whose GDP is expected to recover to pre-pandemic levels this year. Among these, three advanced countries were mentioned: the United States (102.7), South Korea (102.6), and Australia (102.0).

Considering recent improvements in export, production, and sentiment indicators, South Korea's economy is expected to recover to the pre-COVID-19 crisis level (4th quarter of 2019) in terms of quarterly GDP during the first half of this year. If the economy grows at an average rate of 0.6% for the first and second quarters, it is analyzed that the GDP level of the 4th quarter of 2019 will be surpassed in the second quarter.

Furthermore, the Biden administration's stimulus package is expected to act as a positive signal for economic recovery.

The IMF raised the U.S. growth forecast for this year from 5.1% to 6.4%. The $1.9 trillion stimulus package has been reflected, but the $2 trillion infrastructure investment planned over eight years has not been included. According to a report by the Hyundai Research Institute released in November last year, if the U.S. growth rate rises by 1 percentage point, South Korea's growth rate is expected to increase by 0.4 percentage points.

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