Value context and insight. lkm@koreatimes.co.kr
Korea to fall behind Taiwan in per capita GDP next year: IMF
The International Monetary Fund logo / Reuters-Yonhap
By Lee Kyung-min
Korea’s per capita gross domestic product is expected to come in lower than Taiwan's, constrained by low growth, extended political uncertainties, slow recovery in domestic demand and weaker currency relative to the U.S. dollar, according to a recent report by the International Monetary Fund (IMF).
According to the Bank of Korea (BOK) on Monday, the IMF's latest World Economic Outlook report, released April 22 (local time), also projected that Korea’s per capita GDP will exceed $40,000 in 2029, an adjustment that came just six months after it forecast the level would be in reach by 2027.
The global organization noted that Korea’s per capita GDP will likely reach $34,642 this year, down 4.1 percent from the previous year. Then, the figure is expected to come to $40,341 in 2029, following $35,880 in 2026, $37,367 in 2027 and $38,850 in 2028.
This is a substantial downgrade from October 2023, when it said the figure for 2029 would be $44,347.
Korea’s per capita GDP is expected to fall behind Taiwan’s next year, as Taiwan’s figure is projected to rise steadily from $33,437 last year to $34,426 this year and $36,319 next year.
By 2030, however, Korea is expected to overtake Taiwan again, with a per capita GDP of $41,892, higher than Taiwan’s $41,244.
As for Japan, the figure is estimated to reach $40,029 in 2029, a steady rise from $35,653 in 2026, $37,054 in 2027 and $38,813 in 2028.
The figures align with bleaker growth forecasts for Korea.
The IMF said Korea’s real GDP growth is expected to remain at 1 percent in 2025 before recovering slightly to 1.4 percent in 2026. It will then rise to 2.1 percent in 2027 but remain flat at 2.1 percent in 2028. The rate is expected to be 1.9 percent in 2029 and 1.8 percent in 2030.
Taiwan, on the other hand, will see a robust annual growth of around 2 to 2.5 percent from next year through 2030, the IMF said.
According to the BOK, the median projection for Korea’s economic growth in 2025 by about 40 major investment banks and market participants stood at 1.4 percent as of April 10, with the bottom 25 percent projecting 1.1 percent.
The estimates have been revised downward from earlier forecasts despite a 0.1 percentage point boost from the 12 trillion won ($8.3 billion) supplementary budget.
Further advancing the grim outlook is a sharp downward revision to the country’s growth forecast by the central bank slated for next month.
The initial estimate of 1.5 percent for this year is likely to be lowered to around 1 percent, reflective of the 0.2 percent contraction in the first three months of this year.
The annual figure will be weighed down by tariff shocks from the U.S., including potential retaliatory tariff policies.
Last year, Korea registered a per capita estimate of $36,024, outstripping Japan and Taiwan.
The robust performance was led by improvement in trade terms. Higher export prices of semiconductors and lower import prices of raw materials such as crude oil bolstered the country’s economic output.