Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Korea surpasses Japan in GNI per capita for 1st time: BOK
Choi Jung-tae, head of the national accounts coordination team of the Bank of Korea's (BOK) Economic Statistics Department, speaks during a press briefing on revised national accounts at the BOK's headquarters in Seoul, Wednesday. Yonhap
By Yi Whan-woo
Korea overtook Japan for the first time in gross national income (GNI) per capita last year, driven by the weakening yen that dropped to its lowest level in more than 30 years, according to Bank of Korea (BOK) data Wednesday.
GNI measures a nation's wealth by adding up its gross domestic product (GDP) and net income from abroad.
Financial sources, however, remained cautious about attaching too much importance to the BOK's data.
They noted that the data came after the central bank adjusted the base year of national accounts to 2020 from 2015 in its regular revision of relevant statistics.
Comparable to the financial statement of a corporation, national accounts record all transactions that take place within an economy.
They include GDP, the currency rate and other determinant factors of GNI per capita that worked in favor of Korea over Japan when the base year was adjusted, according to the sources.
Under the revised national accounts statistics, Korea's GNI per capita in 2023 increased 7.2 percent — from $33,745 to $36,194.
The revised GNI per capita was higher than that of Japan at $35,793 the same year.
"It is the first time that Korea surpassed Japan in terms of GNI per capita," said Choi Jung-tae, head of the national accounts coordination team of the Bank of Korea's (BOK) Economic Statistics Department, adding, "Japan's lower GNI per capita than Korea was largely attributable to the depreciation of the Japanese currency."
The value of Japan's currency has tumbled so much against the U.S. dollar, that its value is back to where it was in 1990, shortly after Japan's famous "bubble economy" burst.
For instance, the Japanese currency hit a 34-year low of 154.85 yen against the greenback, April 26, close to the sensitive threshold of 155.
Under the circumstances, Korea was ranked sixth after the United States, Germany, the United Kingdom, France and Italy concerning GNI per capita on a list of countries with a population of more than 50 million.
Asked when Korea's GNI per capita might reach the $40,000 milestone, the BOK official said "making such a prediction is not easy but it may be possible in a couple of years if the currency rate is stabilized."
Concerning the significance of Korea overtaking Japan in GNI per capita, Citizens' Coalition for Economic Justice (CCEJ), a civic activist group, said, "There's no need to be overly excited."
"A stat can make a country's economy seemingly better or worse depending on the base year or other criteria," CCEJ said. "For example, Korea's GNI per capita may still be lower than Japan in other countries' stats."
Meanwhile, the BOK said Korea is ranked as the 12th largest economy in the world in terms of nominal GDP under the revised national accounts.
It was believed to be ranked 13th or 14th under the old national accounts.