Per Capita GDP May Dip Below $15,000
South Korea's per capita gross domestic product (GDP) is expected to fall sharply this year due to a sharp economic downturn and a weak local currency, Yonhap News Agency reported Wednesday.
The country's per capita GDP may fall below the $15,000 mark in 2009 for the first time in five years should the economy shrink 4 percent and the local currency trade at an average of 1,300 won to the U.S. dollar.
In 2008, the figure stood at $17,707. Per capita GDP is calculated by dividing the total value of goods and services produced in an economy by its population.
"The global financial meltdown is likely to last until the first half and there are few clear signs that the crisis will be subdued in the second half," Song Tae-jeong, an economist at Woori Finance Holdings, was quoted as saying.
"In light of that, the Korean economy will likely lose steam sharply and there is a high possibility that the won's weakness will continue."
South Korea's per capita GDP surpassed the $10,000 mark for the first time in 1995, but the Asian financial crisis sent the figure down to $7,477 in 1998. It has continued to rise since then, reaching $20,015 in 2007 ― the first time it broke the $20,000 level.
The bleak outlook for 2009 comes as the Korean economy shrank 5.6 percent last quarter from the three months earlier, the worst performance in almost 11 years, due to tumbling exports and weak domestic demand.
The local economy is widely expected to head into a recession this year, with the government predicting a 2 percent contraction.
The Korean currency tumbled 25.7 percent to the dollar in 2008 alone. It has been on the skid this year as well, dipping 16.7 percent so far, battered by the global financial turmoil.
A weaker won brings down the dollar conversion value of the per capita GDP.
Analysts say that in the worst-case scenario of minus 6-percent economic growth, there is a chance the per capita GDP figure could dip to the $12,000 level, similar to what the nation posted in 2003.