BRICs, Australia Outgrow Korea
Korea Dips to 15th in Global GDP Ranking
By Kim Jae-kyoung
Staff Reporter
South Korea fell one place to 15th in the worldwide gross domestic product (GDP) rankings last year.
The nation's GDP totaled $929.1 billion in 2008, the 15th highest among the 186 countries, down from 14th in 2007, according to the World Bank. GDP is the broadest measure of goods and services produced in a country in a year.
Korea jumped to 11th in 2003, but has since fallen over the last five years, outpaced by India, Brazil, Russia and Australia.
The key reason behind the setback was the emergence of the so-called BRIC countries, (Brazil, Russia, India and China) coupled with the won's depreciation against the dollar.
``Korea was overtaken by BRICs over the past few years as they outgrew Korea. In addition, the won's weakness during the latter half of last year pulled down its ranking,'' a BOK economist said.
In its April outlook report, the International Monetary Fund (IMF) forecasted that Korea's ranking will drop to 16th in the world in 2009 and 2010 before recovering to the 14th in 2011.
Last year, the United States ranked top with a GDP of $14.2 trillion, followed by Japan with $4.9 trillion, China with $3.8 trillion and Germany with $3.6 trillion. China grabbed third place for the first time last year, overtaking Germany, while Brazil climbed by two notches to 8th.
It is expected that Korea will see its global ranking further slide in the coming decades. In its report last year, Goldman Sachs predicted that the Korean economy would plunge to 19th in the world by 2050, outpaced by emerging economies such as Indonesia, Turkey, Nigeria and the Philippines.
``Several emerging economies, including BRICs, Egypt, the Philippines, Indonesia, Iran, Mexico and Vietnam will matter more and more for global spending patterns,'' it said in the report, forecasting that China will dominate the global economy in 2050 with a GDP of $70 trillion, followed by the United States, India, EU-5, Brazil and Russia.
Market analysts said that if Korea capitalizes on China's rapid growth, the nation's future could turn out very differently.
``The rise of China is both an opportunity and a threat to Korea,'' said Jim O'Neill, head of Goldman Sachs Global Economic Research, the company behind the coining of the acronym BRIC.
``Korea should try to undertake policy steps to boost productivity and move to higher value-added businesses, and let the lower value-added businesses, especially in manufacturing, shift elsewhere,'' he said.