Surpassing Japan
South Korea's per capita GDP in 2016 will outstrip that of Japan with nearly US$40,000 of purchasing power.
“South Korea's GDP per capita will reach almost the same level of Japan next year, and it is expected to overtake Japan in 2016. This is a splendid achievement just 70 years after the independence from Japan,” said Lee Jun-hyeop, head of the economic trends analysis department of Hyundai Research Institute on Dec. 21, in the report of 2015 Domestic Trends 10+1.
Based on the prediction of International Monetary Fund Purchasing Power Parity (PPP) figures, the report predicted that Korea's GDP per capita in 2015 will be US$38,760, which is close to that of Japan (US$39,108), and Korea's GDP per capita in 2016 will exceed that of Japan in 2016 (US$39,669) by US$39,828.
The report pointed out, “While Japan's potential growth rate is 0 percent, that of Korea maintains at 3 percent, increasing the difference between the potential growth rates of Korea and Japan. We need to enlarge a growth potential, improve the economic constitution and the quality of life of people to avoid secular stagnation which is prevalent in Japan.”
Meanwhile, as the FTA between Korea and China takes effect next year, economic exchanges between two countries will intensify, and it is expected to open the 2.0 era of Chi-Korea, resulting in new cooperation in politics, foreign affairs, and culture.
As an exports slump is expected due to the continued low growth of the global economy, the nation should reinforce the economic virtuous circle that leads to increased household income in the expansion of consumption, production, and investment by escaping the export led-growth strategy and attempting accompanied growth of domestic and foreign demands.
It has been predicted that Korea's export portfolio will change to a great extent. While the weight of exports to U.S. and ASEAN markets will increase at a large scale, that of exports to Japan and the E.U. will decrease. Also, it was predicted that while the weight of exports of IT and automobiles will stay almost the same, that of exports of petroleum products, shipbuilding, and steel will decrease.