S. Korea is likely to overtake Italy in national income

Bloomberg forecasted that South Korea’s Gross National Income (GNI) of 2020 will reach G7 levels, surpassing Italy.

According to the newspaper, Seoul’s per-capital income stood $33,790 in 2019 based on World Bank data, slightly below Italy’s $34,530. Italy has the lowest income among G7 countries.

It also said that economists estimate Italy’s economy shrank by around 9% last year due to mass shutdowns, a measure introduced to slow down the spread of COVID-19, adding that South Korea, on the other hand, is expected to report quarterly growth of 0.9% in the last three months of 2020 that would limit the contraction over the whole year to 1%.

“South Korea probably ended 2020 with less economic scarring than its developed peers and comparable income levels” it reported, attributing it to an increase in exports and a rising demand for semi-conductors. It said it would be the first time that Seoul’s GNI reaches G7 levels.

Bloomberg said, however, job losses that are piling up fastest since 1999 – a result of increasing exports not leading to more consumption in the domestic market - remains a threat to the South Korean economy.


Teuk-Gyo Koo kootg@donga.com