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Korea`s avg. nat`l income to beat Japan`s by 2030: report

Posted September. 19, 2012 05:15,   

Korea`s sovereign credit rating is on par with or higher than rival Japan, with economic experts predicting Korea`s economic power will surpass Japan`s within 20 years. Nevertheless, they added that Korea should first narrow its technological gap with Japan, enhance basic research ability, and maintain fiscal soundness by managing welfare spending.

Dong-A Ilbo reporters interviewed 10 Korean experts on the Japanese economy Tuesday, and seven said Korea will outpace Japan in per capita GDP by 2032.

Korea`s average income is forecast to hit 23,690 U.S. dollars this year, half of Japan`s 46,973 dollars. Three of the seven experts said Korea`s per capita GDP will surpass Japan`s in 15 years, and two said this will happen in 10 years and the remaining two in 20 years.

Yokohama City University professor Kook Joong-ho said, "It`s difficult for Korea`s economy to outpace Japan`s considering the demographical difference and Japan`s reserved strength," adding, "Nevertheless, Korea`s per capita GDP could surpass Japan`s within 10 to 15 years if the Korean economy continues to grow."

Foreign economic think tanks also have similar projections. IHS Global Insight, a leading U.S. institution for economic research, projected Korea`s per capita GDP to reach 72,432 dollars by 2031 to surpass Japan`s 71,788 dollars. The Japan Business Federation also forecast that by 2030, Korea will outpace Japan in household income based on purchasing power parity.

Experts say Korean companies` speedy solutions and aggressive investment and the Korean government`s crisis response capability will be the main drivers of Korea`s growth. They did warn, however, that further increases in welfare spending could worsen fiscal soundness, while anti-corporate sentiment could weigh down corporate growth and dampen Korea`s chance to outpace Japan.

Korea University professor Oh Jung-keun said, "The worsening of fiscal soundness and economic democratization movements of political parties can dent business investment, and coupled with overseas relocation of production bases, will force the Korean economy to follow the footsteps of Japan`s and enter a low-growth period."



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