Last year, the per capita Gross Domestic Product (GDP) is estimated to have re-entered the range of $36,000.
If the economy grows as projected by the government this year, the per capita GDP is expected to surpass $37,000.
According to the Ministry of Strategy and Finance, Bank of Korea, and Statistics Korea on the 2nd, the 2024 per capita GDP is projected to increase by $454 (1.28%) year-on-year to $36,024.
The government noted in the economic policy direction announced last month that the nominal growth rate for 2024 is expected to be 5.9%.
Using the 2023 nominal GDP of 2,401 trillion 894 billion won reported in the 'Recent Economic Trends (Green Book),' if we backtrack, last year's nominal GDP is calculated to be 2,542 trillion 859 billion won.
By applying last year's average won/dollar exchange rate (1,363.98 won) to this figure and dividing by the total population (51,751,065) estimated by Statistics Korea, we arrive at the per capita GDP.
The International Monetary Fund (IMF) estimated Korea's per capita GDP for 2024 to be $36,132 last October, which is a similar level.
According to IMF estimates, Japan's per capita GDP was $32,859, and Taiwan's was $33,234.
Even based on government projections, last year, Korea's per capita GDP clearly surpassed those of Japan and Taiwan.
Korea's per capita GDP exceeded $30,000 in 2016 at $30,839. It rose to $35,359 in 2018 but fell to $33,503 in 2020 due to the impact of COVID-19.
In 2021, due to various consumption support measures by the government, fiscal stimulus, easing of social distancing, and strong exports, it peaked at $37,503, but dropped to $34,810 in 2022.
Since then, the per capita GDP has increased for two consecutive years starting in 2023. However, the growth rate compared to the previous year decreased from 2.18% in 2023 to 1.28% in 2024.
The main reason for the estimated increase in last year's per capita GDP is the growth in nominal GDP, which reflects the scale of the Korean economy. According to government projections, the growth rate of nominal GDP was 5.9% last year, the highest since 2021 (7.9%).
The government analyzed that our economy has steadily expanded due to improvements in trade conditions and rising prices.
The slowdown in the growth rate of the total population, which is the denominator, also contributed to the increase in per capita GDP.
However, the exchange rate has been a factor in lowering per capita GDP. Last year's won/dollar exchange rate rose by 58.57 won compared to the previous year, which significantly reduced per capita GDP. If the exchange rate had been at the 2023 level (1,305.41 won), last year's per capita GDP would have reached $37,641.
If the economic growth trend continues as projected by the government this year, the per capita GDP is expected to re-enter the $37,000 range.
Applying the economic growth rate (3.8%) announced in this year's economic policy direction and assuming the won/dollar exchange rate is at the same level as last year, this year's per capita GDP is estimated to increase by $1,417 compared to last year, reaching $37,441.