No Increase

Stacks of South Korean won for delivery to commercial banks at the Bank of Korea’s headquarters in Seoul.
Stacks of South Korean won for delivery to commercial banks at the Bank of Korea’s headquarters in Seoul.

 

According to the Bank of Korea, the total national wealth of Korea added up to 11.0392 quadrillion won (US$10.0977 trillion) in 2013, increasing by 371.5 trillion won (US$339.6 billion) from the previous year, with the ratio of national wealth to GDP remaining at around 770 percent for three years in a row.

In 2012, the ratio was 590 percent in Australia, 350 percent in Canada, and 640 percent in Japan. “The relatively higher ratio is because the prices of real estate assets are relatively higher in Korea,” the central bank explained. At the end of 2013, land accounted for 53.0 percent of the national wealth in Korea, and built assets took up 35.7 percent of it.

“The national wealth-to-GDP ratio failed to go up, as non-financial assets showed no significant increase,” the bank added. Specifically, the rate of increase in non-financial assets dropped from 8.4 percent to 3.8 percent and then to 2.9 percent between 2011 and 2013, led by a decline in GDP growth. During the period, the nominal GDP growth rate fell from 5.3 percent to 3.4 percent before edging up to 3.8 percent, and asset prices dropped in the housing and securities markets alike to lead to a decrease in capital gains. Under the circumstances, households and non-profit organizations reduced the ratio of their non-financial assets.

In the meantime, the net assets of an average Korean household at the end of 2013 was estimated at 330.85 million won (US$302,632). On a market exchange rate basis, it is equivalent to 46 percent and 60 percent of those of American and Japanese households, respectively.

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