South Korea is expected to overtake Japan in gross domestic product (GDP) per capita in 2027, according to a Japanese economic research center. GDP per capita is an indicator of individual wealth.
The Japan Center for Economic Research under the Nihon Keizai Shimbun predicted in its report released on Wednesday that South Korea’s GDP per capita will exceed that of Japan in 2027 at $45,000 (approx. \53 million). The GDP per capital of South Korea in 2035 is expected to surpass the $60,000 mark while that of Japan is likely to hover around $50,000.
Japan’s nominal GDP per capita was $39,890 last year, 25 percent higher than that of South Korea ($31,954). However, South Korea’s nominal GDP per capita is expected to increase at an annual growth rate of 6.0 percent through 2025 while that of Japan is projected to stop at 2.0 percent.
Such difference in projection for the two countries stems from their different level of labor productivity. The report said South Korea’s labor productivity growth will drive up its GDP per capita by 4 percentage points while that of Japan will increase the country’s labor productivity by 2 percentage points. The Japan Center for Economic Research said Japan’s low labor productivity results from a delay in digital reform.