Korea's GNI per capita to exceed $40,000 for 1st time in 2026: BOK
Containers are stacked at a port in Pyeongtaek, Gyeonggi Province, Sunday. Yonhap
Chip export boom, stronger won drive per capita GNI to record high
Korea's gross national income (GNI) per capita is likely to surpass $40,000 this year for the first time, helped by a sharp increase in national income driven largely by the semiconductor boom and a stronger won, the Bank of Korea (BOK) said Monday.
The new prediction comes as the country's national income has posted strong growth in the second quarter.
Nominal GNI rose 8.8 percent in the second quarter from the previous quarter and 26.4 percent from a year earlier. Real GNI, which strips out the effects of inflation, increased 3.1 percent on-quarter and 15.6 percent on-year, marking its fastest annual growth since the fourth quarter of 1988.
Kim Hwa-yong, director of the BOK's production, expenditure and income division, said per capita GNI is on track to surpass $40,000 this year.
"If there are no unexpected shocks in the remainder of the year and nominal GNI growth remains at its current pace while the exchange rate remains stable, per capita GNI in U.S. dollar terms is highly likely to exceed $40,000," Kim said during a briefing.
Per capita GNI is calculated by dividing the total income earned by a country's residents at home and abroad by its population. It is commonly converted into U.S. dollars to compare living standards across countries.
Korea's GNI per capita first surpassed $30,000 in 2014 and has remained in the $30,000 range since then. Last year, in terms of won, it rose 4.6 percent from a year earlier but increased just 0.3 percent in dollar terms to $36,963 as the won weakened against the U.S. dollar.
The expected jump above $40,000 this year is being driven primarily by a sharp increase in nominal national income, with strong semiconductor exports boosting corporate earnings. The won's strengthening against the dollar has also lifted the figure when converted into U.S. currency.
The won has strengthened sharply in recent weeks, with the won-dollar rate falling from the high 1,400s in late July to the mid-1,300s in early September. It reached the 1,330-won range Monday, its strongest level in nearly two years, as strong semiconductor exports boosted dollar sales by exporters.
Experts said the exchange rate could prove to be the biggest variable in whether Korea actually crosses the $40,000 threshold.
"Semiconductor exports are likely to remain strong throughout the year, but if the won weakens again after its recent stabilization, that could affect per capita GNI in dollar terms," said Kang Sung-jin, a professor of economics at Korea University.
Kang also pointed out that crossing the $40,000 mark may not mean that Koreans' wages or living standards have improved by the same extent, as gains in national income are not necessarily distributed evenly across households and industries.
Meanwhile, BOK data released the same day showed that the economy maintained its growth trajectory in the second quarter. Real gross domestic product, a key measure of economic growth, increased 0.6 percent from the previous quarter.
On a yearly basis, the economy expanded 3.7 percent in the April-June period, extending its growth momentum after growing 3.8 percent from a year earlier in the first quarter.