Per Capita GDP to Fall Below $17,000 This Year

Per capita GDP this year is expected to fall below 17,000 U.S. dollars, the lowest since 2004 and the second straight year of decline.

The last time the figure decreased for two straight years was in 1997-98.

Major private think tanks forecast yesterday that per capita GDP will range between 16,421 and 16,738 dollars. The fall in national GDP and the weakening of the Korean won to between 1,200 and 1,300 won per dollar, up from last year’s annual average of 1,103, are the major factors in the drop.

Samsung Economic Research Institute predicted per capita GDP of 16,738 dollars on the assumption that the annual average won-dollar rate will reach 1,245 and the Korean economy will decline 2.4 percent this year.

If that happens, per capita GDP will fall around 15 percent from last year’s 19,108 dollars.

Chief Samsung researcher Hwang In-seong said, “Korea’s per capita GDP has dropped significantly due to the declining economy and the surging won-dollar exchange rate.”

LG Economic Research Institute predicted for this year a won-dollar rate of 1,260 on an annual basis, economic growth of minus 1.7 percent, and per capita GDP of 16,700 dollars.

Korea Economic Research Institute said the won will finish at 1,290 to the dollar this year, with the economy to decline 1.9 percent and per capita GDP to reach 16,421 dollars.

The institute’s chief researcher Kim Chang-bae said, “Per capita GDP will surpass 20,000 dollars next year if the economy grows more than three percent and the won stays around the 1,100 level per dollar. It will be hard for per capita GDP to exceed 20,000 dollars.”

After reaching 21,656 dollars to surpass the 20,000 mark for the first time in 2007, per capita GDP plunged below 20,000 dollars last year. Since then, it has failed to break the 20,000 dollar mark.

lovesong@donga.com