IMF's Alarming Outlook: South Korea to Fall Further Behind as Per Capita GDP Gap with Taiwan Widens

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Last year, Taiwan surpassed South Korea in per capita Gross Domestic Product (GDP) for the first time in 22 years, and the International Monetary Fund (IMF) has projected that the gap will continue to widen in the coming years.

According to Yonhap News Agency, in its World Economic Outlook released on April 15, the IMF forecasted South Korea’s per capita GDP for this year to be $37,412. This represents a 3.3% increase from last year, but it is a slight downward revision from the projection made in October 2023.

The IMF expects South Korea’s per capita GDP to reach $40,695 in 2028, marking the beginning of the “$40,000 era.” However, the pace of growth is expected to be slower than that of its competitors.

Containers piled up at Pyeongtaek Port in Gyeonggi Province. Photo is not directly related to the content of the article. Photo by Yonhap News Agency

In contrast, Taiwan is projected to see even steeper growth. Taiwan’s per capita GDP this year is expected to be $42,103, meaning it will surpass the $40,000 mark ahead of South Korea. By 2029, Taiwan’s per capita GDP is forecast to reach $50,370, crossing the $50,000 threshold as well.

The gap between the two countries is expected to widen every year moving forward. According to the IMF, the difference in per capita GDP will expand to $4,691 in 2026, $5,880 in 2027, $6,881 in 2028, $7,916 in 2029, and $9,073 in 2030. By 2031, South Korea is projected to reach $46,019, while Taiwan is expected to hit $56,101, with the gap exceeding $10,000.

This widening gap is also expected to be reflected in the international rankings. South Korea is projected to fall slightly from 40th place this year to 41st in 2031, whereas Taiwan is expected to rise from 32nd to 30th, resulting in a difference of more than 10 positions.

Taiwan’s rapid growth is attributed to the advantages of its semiconductor-centric industrial structure. The global proliferation of artificial intelligence (AI) and the semiconductor supercycle are driving both exports and investments as twin engines of growth. Major international investment banks are also maintaining an optimistic outlook, forecasting Taiwan’s economic growth rate this year to average in the 7% range.

The gap is also evident based on purchasing power parity (PPP). The IMF estimated that this year, Taiwan’s per capita GDP based on PPP will be $98,051, while South Korea’s will be $68,624. Taiwan is expected to reach around $120,000 by 2031, whereas South Korea is projected to remain at about $83,696.

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