South Korea’s GNI per capita is expected to top US$30,000 this year after having broken the US$20,000 mark 12 years ago, the Bank of Korea said on Dec. 9.
South Korea’s GNI per capita reached US$29,745 last year. The value for the first three quarters of this year is estimated at US$23,433. If this pace continues, it is estimated to reach US$31,243 at the end of this year.
South Korea broke the US$20,000 mark in 2006 with US$20,795. According to the World Bank, the country ranked 31st in the world last year. When it comes to countries with a population of at least 20 million, South Korea ranked ninth behind the United States, Japan, Britain, France, Germany, Canada, Australia and Italy.
Despite the rosy outlook, few ordinary people are actually feeling it with real economic conditions showing no signs of improvement. According to the central bank of South Korea, this year’s domestic economic growth is likely to stand at 2.7%, which is the lowest since 2012. Low growth is likely to continue for years.
The contribution of consumption and investment to economic growth was negative 1.3 percentage points in the third quarter of this year, the lowest since the third quarter of 2011. This was offset by exports. Specifically, the contribution of exports to economic growth was 1.7 percentage points during the same period. This trend accelerated this year. The contribution of consumption and investment had been 1.2 percentage points in the first quarter, but fell to negative 0.7 percentage points and negative 1.3 percentage points in the following quarters.
Besides, the prices of houses are skyrocketing and self-employed persons are facing more and more difficulties after the implementation of the 52-hour work week. The income divide is continuing to widen between those working for large and smaller corporations and between high and low income earners. In the second quarter of this year, large corporations’ operating profit-to-sales ratio rose 0.4 percentage points year on year to 7.8% whereas smaller firms’ fell from 7.4% to 7.3%.
In the third quarter, the bottom 20% households’ average monthly income fell 7.0% from a year earlier after an 8% decline in the first quarter and a 7.6% decline in the second quarter. The average monthly income of those constituting the second-lowest income group continued to fall for three quarters in a row, too.
Meanwhile, the top 20% households’ average monthly income showed the highest growth in the five groups in each quarter of this year, rising 8.8% in the third alone. During the period, the income of the top 20% was 552% of that of the bottom 20%, the highest since records began.