By Choi Kyong-ae
Korea's per capita gross national income (GNI), a key indicator of the population's purchasing power, reached $28,180 in 2014, up $2,001 from a year earlier, the Bank of Korea (BOK) said Wednesday.
The revised gross domestic product (GDP) growth came in at 3.3 percent last year, compared with a 2. 9 percent gain the previous year, it said.
But people will not feel the rise in per capita income because it came as a result of the won's gain against the dollar, the bank said.
"Last year, the won rose by nearly 4 percent against the dollar compared to a year earlier. The GNI growth was not due to increases in salaries but due to the won's strength," Samsung Futures currency analyst Jeon Seung-ji said.
The won remained strong against the greenback last year compared to other currencies such as the euro and the yen. The dollar traded at a weaker average of 1,053 won in 2014 compared with the previous year's average of 1,095 won, she said.
Hana Daetoo Securities analyst Soh Jae-yong echoed Jeon's view, saying companies didn't invest, nor increase wages for their employees last year due to lingering economic uncertainties. "Consumers remained passive in spending as housing and other living costs continued to rise despite frozen wages."
Meanwhile, the BOK said in a statement that GDP growth last year resulted from improved exports.
Despite increases in GDP and GNI, Korea is struggling with a lack of spending and the weaker price competitiveness of Korean products in global markets this year due to the won's slower weakening against the dollar compared to the yen and other currencies, analysts said.
The economic outlook for this year may change given current market conditions.
In January, the BOK projected the economy to grow by 3.4 percent, down from 3.9 percent; while its inflation projection fell to 1.9 percent from 2.4 percent. In December, the Ministry of Strategy and Finance projected economic growth of 3.8 percent and inflation of 2 percent this year. The ministry may revise down the figures later this year, they said.
The central bank looks set to lower the forecast next month given Governor Lee Ju-yeol's comments earlier this month. He didn't expect the economy to recover enough to meet the bank's growth and inflation forecasts due to declining exports, weak spending and a lack of facility investment so far this year.
For March, the BOK cut the benchmark interest rate by 25 basis points to an all-time low of 1.75 percent after a 50 basis point cut in two steps last year. It is under pressure to cut the key rate further to boost the economy in the coming months before a rate hike in the U.S. expected later this year.
Korea's per capita gross national income (GNI), a key indicator of the population's purchasing power, reached $28,180 in 2014, up $2,001 from a year earlier, the Bank of Korea (BOK) said Wednesday.
The revised gross domestic product (GDP) growth came in at 3.3 percent last year, compared with a 2. 9 percent gain the previous year, it said.
But people will not feel the rise in per capita income because it came as a result of the won's gain against the dollar, the bank said.
"Last year, the won rose by nearly 4 percent against the dollar compared to a year earlier. The GNI growth was not due to increases in salaries but due to the won's strength," Samsung Futures currency analyst Jeon Seung-ji said.
The won remained strong against the greenback last year compared to other currencies such as the euro and the yen. The dollar traded at a weaker average of 1,053 won in 2014 compared with the previous year's average of 1,095 won, she said.
Hana Daetoo Securities analyst Soh Jae-yong echoed Jeon's view, saying companies didn't invest, nor increase wages for their employees last year due to lingering economic uncertainties. "Consumers remained passive in spending as housing and other living costs continued to rise despite frozen wages."
Meanwhile, the BOK said in a statement that GDP growth last year resulted from improved exports.
Despite increases in GDP and GNI, Korea is struggling with a lack of spending and the weaker price competitiveness of Korean products in global markets this year due to the won's slower weakening against the dollar compared to the yen and other currencies, analysts said.
The economic outlook for this year may change given current market conditions.
In January, the BOK projected the economy to grow by 3.4 percent, down from 3.9 percent; while its inflation projection fell to 1.9 percent from 2.4 percent. In December, the Ministry of Strategy and Finance projected economic growth of 3.8 percent and inflation of 2 percent this year. The ministry may revise down the figures later this year, they said.
The central bank looks set to lower the forecast next month given Governor Lee Ju-yeol's comments earlier this month. He didn't expect the economy to recover enough to meet the bank's growth and inflation forecasts due to declining exports, weak spending and a lack of facility investment so far this year.
For March, the BOK cut the benchmark interest rate by 25 basis points to an all-time low of 1.75 percent after a 50 basis point cut in two steps last year. It is under pressure to cut the key rate further to boost the economy in the coming months before a rate hike in the U.S. expected later this year.
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