Slow Economy

The GNI per capita of South Korea reached US$20,795 in 2006 to break the US$20,000 mark for the first time and has remained below US$30,000 all the way since then
The GNI per capita of South Korea reached US$20,795 in 2006 to break the US$20,000 mark for the first time and has remained below US$30,000 all the way since then

 

The Bank of Korea announced on March 28 that South Korea recorded a real GDP growth rate of 2.8% last year as in the previous year. In 2016, its GNI per capita was US$27,561, up 1.4% from a year ago. The GNI per capita reached US$20,795 in 2006 to break the US$20,000 mark for the first time and has remained below US$30,000 all the way since then.

At present, both household spending and investment by companies are stagnant in South Korea. Last year, the country’s gross savings rate increased 0.2 percentage points to a 17-year high of 35.8%. An economic research institute explained that the decline in spending and investment and increase in savings are attributable to an uncertain future.

These statistical data show that conditions the South Korean economy is facing are pretty unfavorable although the conditions are also related to population factors such as rapid aging and foreign exchange rate factors like depreciation of the South Korean currency. Examples of the adverse conditions include sluggish exports, a decline in domestic demand, global trade protectionism and trade retaliation by China related to THAAD deployment.

“The real GDP growth rate that has failed to exceed 3% for years implies that the slow growth of the South Korean economy is becoming permanent,” said the LG Economic Research Institute, adding, “The rate is likely to remain below 3% this year, too.”

 

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