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Korea's Per Capita GDP Will Outpace Japan's in 5 Years
Per Capita GDP
Korea's Per Capita GDP Will Outpace Japan's in 5 Years
  • By matthew
  • November 17, 2014, 06:39
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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.

 

South Korea's per capita GDP will overtake that of Japan by exceeding US$40,000 in 2019, said a report.

According to the report titled “per capita GDP Will Surpass Japan in Five Years” published on Nov. 16 by researcher Kang Jung-gu of the LG Economic Research Institute, this year's difference between GDPs per capita of Korea and Japan will decrease to the lowest figures, and the difference is expected to keep on decreasing in the future. The current per capita GDP of Japan flinched at US$37,000, while that of Korea increased to US$27,000.

The International Monetary Fund (IMF) and Organization for Economic Cooperation and Development (OECD) expected that the gap between the real growth rates of Japan and Korea will stay at 3 percent. Also, the gap between inflation rates (based on GDP deflator) of the two countries will continue by 1 percent. When the trend of recent exchange rates is taken into consideration, Korean per capita GDP will exceed US$40,000 in 2019 by the IMF standard and in 2010 by the OECD standard, defeating Japan by both measurements.

However, Kang pointed out that Korea's per capita GDP has increased by 55 percent over the last 5 years, and exchange rates have contributed to it by 45.3 percent of the increase.

Due to this, Kang emphasized that Korea should put efforts into improving distribution through domestic consumption and keeping the growth rate through locating new growth engines in the future, differently from the past when Korea's economy had grown by imitating Japanese models in the 1960s. This means that growth should be sustainable and involve every economic subject.