Korea's GDP ranks 14th for five consecutive years

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Fri, June 30, 2017 | 01:03

Finance

Korea's GDP ranks 14th for five consecutive years

Posted : 2014-07-13 16:41

Updated : 2014-07-14 10:55

By Chung Ah-young

Korea has remained the world's 14th-largest economy for five consecutive years up to 2013.

According to the Bank of Korea and the World Bank's World Development Indicators, Korea's nominal gross domestic product (GDP) last year was $1.3 trillion despite new assessment criteria.

It was the nation's first GDP ranking since the central bank introduced new national accounting standards for nominal GDP this year.

The System of National Accounts 2008 is the latest version of the United Nations Statistical Commission's method of evaluating the performance of world economies according to uniform standards.

Under the new standards, when calculating a nation's GDP one must include research and development expenditures, weapons purchases, and spending on cultural products.

Under the old method, those items were considered one-time expenditures and excluded from calculations.

The central bank had expected the new formula to increase Korea's GDP, as it did for other nations such as the United States, Japan and Australia.

If one recalculates Korea's past GDP figures using the new standards, Korea's economy ranked 12th in 2000 and 2001 and rose to No. 11 in 2002. After holding No. 11 spot until 2004, it rose to No. 10 in 2005 but fell back to No. 11 in 2006. Korea dropped to 13th place in 2007 and 15thplace in 2008 before settling in 14th place every year since 2009.

Using the old formula, Korea's nominal GDP ranked 15th in the world from 2008 to 2012.

Analysts attribute Korea's lower-than-expected GDP ranking to the global financial crisis.

Korea's per capita gross national income (GNI) ranked 46th in 2013 at $25,920, a
figure converted to U.S. dollars using the World Bank Atlas method. The Atlas method uses a three-year average of exchange rates when converting domestic GNI to U.S. dollars.

Recently, the Bank of Korea lowered its GDP growth outlook for this year from 4 percent to 3.8 percent amid sluggish domestic consumption.

Meanwhile, the United States topped the global GDP rankings with $16.8 trillion in 2013, followed by China with $9.2 trillion and Japan with $4.9 trillion. Next were Germany, France and Britain with $3.6 trillion, $2.7 trillion and $2.5 trillion, respectively.

Mexico trailed South Korea with $1.2 trillion, followed by Indonesia with $868 billion and Turkey with $820 billion.

chungay@koreatimes.co.kr