Korea to be overtaken by Taiwan in per capita GDP rankings: report

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By Yoon Ja-young

Korea's rise in economic status may be an illusion and it is likely to be overtaken by Taiwan in per capita gross domestic product (GDP) rankings this year, a report noted.

Lee Tae-yeol, a senior research fellow at the Korea Insurance Research Institute (KIRI), noted in a report that the Korean economy is walking sideways in terms of both per capita GDP and global competitiveness.

“The Korean economy surpassing or being on par with some major developed economies such as Spain and Italy is because of those countries' fall in rankings, rather than a rise of Korea,” he said in the report, noting that Korea's rise compared to some European countries is more of an illusion when considering Korea's stagnant economic condition.

Lee cited economic outlook by the International Monetary Fund (IMF), according to which Korea is expected to surpass Italy in terms of per capita GDP this year after surpassing Spain in 2015.

However, he points out that Korea has been stagnant at between 30th and 32nd in per capita GDP rankings since 2015. This contrasts with Taiwan, which is expected to continue rising in rankings based on the IMF outlook. It was ranked 40th in 2019, but is expected to rise to 31st to surpass Korea this year, and join the top 20 in 2027. According to the World Economic Outlook survey released by the IMF in April, Korea's per-capita GDP for this year is estimated to be $34,990, while that of Taiwan will likely be $36,050.

He also cited the global competitiveness rankings report released by the International Institute for Management Development (IMD). Korea has been hovering between 23rd and 29th since 2015, but Taiwan has been on an upward trajectory, ranking at seventh this year. The Switzerland-based school publishes the annual report based on assessment in four categories ― economic performance, government efficiency, corporate efficiency and infrastructure. Compared with 2019, Korea rose in terms of economic performance and infrastructure, while falling in government efficiency and stagnating in corporate efficiency. Taiwan, meanwhile, rose in all four sectors.

“Korea should face the reality of its drifting per capita GDP and competitiveness. There should be efforts to continuously enhance the national competitiveness,” Lee noted in the report.

He added that the government should especially focus on sectors where its competitiveness is falling such as finance and the labor market to come up with improvement measures.