Per Capita Income Falls Below $20,000
By Lee Hyo-sik
Staff Reporter
The nation's per capita income, which exceeded the $20,000 in 2007 for the first time in history, is presumed to have fallen below the psychologically important mark last year, mainly due to the falling won against the dollar.
According to a number of economic research institutes here Thursday, Korea's per capita gross national income (GNI) is estimated to have sunk to around $18,000 in 2008 as the weakening local currency brought down the value of domestic income in dollar terms. The Korean won ended its trading at 1,257.5 won to the dollar last year, plunging 25.7 percent against the greenback.
Woori Financial Group recently put 2008 per capita income at $17,750 under the assumption that the won-dollar rate averaged 1,102.6 won. The gross domestic product (GDP) expanded 2.5 percent from a year earlier and the GDP deflator, a measure of the change in prices of all domestically produced financial goods and services, grew 3 percent for the population of 48.61 million.
In 2007, Korea posted a per capita income of $20,045. It took the nation 12 years to double its income. The GNI surpassed $10,000 in 1995 but dropped to $7,355 in the wake of the currency crisis in 1998. Income has since increased in line with economic expansion.
While announcing a 3.4 percent year-on-year economic contraction in the fourth quarter from a year earlier, Choi Chun-sin, director general of the BOK's economic statistics department, said Thursday that income per person seems to have dropped below $20,000 last year, citing the won's steep loss against the dollar and a slower-than-expected growth as a result of the global financial market turmoil and economic slowdown.
``It is too early to say whether per capita GNI went below $20,000 in 2008, but it's unlikely to stay above that mark,'' Choi said.
According to the central bank, the world's 13th largest economy shrank 5.6 percent in the fourth quarter of last year from three months earlier, marking the sharpest decline since the 1997-98 Asian financial crisis, due to rapidly falling exports and continued sluggish domestic demand.
In all of 2008, the economy expanded 2.5 percent, down from a 5 percent increase in 2007. The central bank projected that the nation's GDP would grow 2 percent this year. On Wednesday, the state-run Korea Development Institute put its 2009 growth outlook at 0.7 percent, sharply down from its earlier projection of 3.3 percent in November.