March 28, 2016 12:59
Korea's per-capita gross national income fell for the first time in six years last year as growth plunged below three percent and the won weakened. Per-capita GNI has been stuck below US$30,000 for 10 years, leaving the country floundering in a middle-income trap.
The Bank of Korea on Friday said the country's per-capita GNI stood at $27,340 last year, down $110 from 2014. The last time per-capita GNI fell on-year was in 2009, just after the global financial crisis.
GNI refers to the total income earned by the people over a set period of time divided by the country's population.
The BOK said GDP grew only 2.6 percent last year, down 0.7 percentage points from the previous year.
◆ Weak Won
Jeon Seung-cheol of the BOK said the biggest reason for the decline in dollar terms was the weakening won. In other words, actual incomes in Korea did not shrink but they bought fewer greenbacks. In fact per-capita GNI rose 4.6 percent to W30.94 million, but the won weakened 7.4 percent against the dollar.
◆ Low Growth
Korea's per-capita GNI surpassed $20,000 in 2006, but fell below again in 2009. It recovered in 2011 and surpassed $25,000 in 2013 and $28,000 in 2014. This led to hopes that it would finally surpass $30,000 last year, but that never happened.
Korea has been slower than advanced countries to break the $30,000 mark. It took the U.S. nine years (1987-1996), and five years in Japan (1987-1992) and Germany (1990-1995). Sweden achieved the feat in just four years.
This year is unlikely to be better because the government's 3-percent GDP growth target looks unattainable. "As long as Korea fails to emerge from low growth and low inflation, $30,000 will be tough to achieve," said Kim Jin-sung at the Woori Finance Research Institute.
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