South Korea reports 1.2% rise in per capita GNI, GDP growth remains steady

Last year, South Korea's per capita gross national income (GNI) increased by 1.2% from the previous year to $36,624. The economic growth rate recorded the same figure of 2.0% as previously announced. The real GNI, which reflects the purchasing power of citizens, grew by 3.5%, marking an increase for the second consecutive year.

According to the Bank of Korea's announcement on the 5th regarding the "Preliminary 2024 Q4 and Annual National Income," last year's real gross domestic product (GDP) increased by 2.0% compared to the previous year. This figure is 0.6 percentage points larger than in 2023 (1.4%); however, it is smaller compared to the increase rates during the endemic period of COVID-19 in 2021 (4.6%) and 2022 (2.7%).

By economic activity, the increase in the electricity, gas, and water supply sector rebounded significantly from -2.9% in 2023 to 4.2% last year. The manufacturing sector (1.7%→4.0%) also recorded a high growth rate and led the growth. In contrast, the construction sector (3.1%→-2.8%) contracted, and the growth in the service sector (2.1%→1.6%) also slowed down. Agriculture, forestry, and fishing (-2.6%→0.8%) exited the decline but recorded only a slight increase.

By expenditure, exports expanded from 3.6% in 2023 to 7.0% last year, showing the largest increase. Government expenditure (1.3%→1.8%) and facilities investment (1.1%→1.6%) also saw expanded growth. However, the growth rate of private consumption (1.8%→1.1%) slowed down, and construction investment, which had turned positive in 2023 (1.4%→-3.0%), returned to a decrease.

Last year's GDP growth rate (compared to the previous quarter) was 0.1%, the same as the preliminary figure. The quarterly growth rate was below 0.1% throughout the second to fourth quarters of last year (-0.2%, 0.1%, 0.1%). The Bank of Korea noted that "as a result of reflecting some actual performance data from the final month of the quarter that was not usable for preliminary estimates, exports (+0.5 percentage points), government expenditure (+0.2 percentage points), and imports (+0.2 percentage points) were revised upward, while construction investment (-1.3 percentage points) and facilities investment (-0.4 percentage points) were revised downward."

Real gross national income (GNI) grew by 3.5%, expanding from the growth rate of 2.2% in 2023. GNI is an indicator that sums all income earned by citizens both domestically and abroad, including wages, interest, and dividends, reflecting purchasing power. It is analyzed that South Korea's real purchasing power improved last year.

The net income from abroad, which is the income earned by South Koreans abroad minus the income earned by foreigners domestically, decreased from 38.1 trillion won in 2023 to 31.6 trillion won last year. However, the improvement in trade conditions reduced the real trade loss from -91.4 trillion won to -53.1 trillion won during the same period, leading to an increase in real GNI, according to the Bank of Korea.

Last year, nominal GDP was 2,549.1 trillion won, growing by 6.2% compared to the previous year. In U.S. dollar terms, it grew by 1.6% to $1.8689 trillion. The nominal GNI growth rates were 5.8% in won terms and 1.3% in dollar terms. Last year, per capita GNI was recorded as 49,955,000 won in won terms and $36,624 in dollar terms, with increases of 5.7% and 1.2%, respectively.

The GDP deflator rose by 4.1% compared to the previous year, doubling the level seen in 2023 (1.9%). This represents the highest growth rate since the foreign exchange crisis in 1998 (4.5%). The GDP deflator is the value obtained by dividing nominal GDP by real GDP, encompassing all price factors that affect national income.

The savings rate increased by 1.6 percentage points to 35.1% compared to the previous year. The growth rate of final consumption expenditure (3.3%) was lower than the growth rate of gross disposable income (5.8%). In contrast, the domestic investment rate decreased from 31.8% in 2023 to 30.0% last year.