Korea’s per capita income to crawl back to $20,000 this year

By Kang Seung-woo

Staff reporter

Korea's per capita income is projected to climb back to the $20,000 level on the strength of solid economic growth and the won's appreciation.

The Ministry of Strategy and Finance said Monday that the nation's per capita gross national income (GNI) is expected to reach about $20,600 this year. The figure is about $3,400 higher than that last year, when it logged $17,175.

"As the economic growth forecast has increased by 0.8 percent to 5.8 percent and the Korean won has remained stronger against the U.S. dollar than in 2009, this year's per capita GNI is likely to surpass $20,000," said an official at the finance ministry.

This is the first time for the nation's GNI to exceed the level since 2007, when it reached $21,659, meaning that Korea is recovering from the global economic crisis.

Korea passed the $10,000 level for the first time in 1994, posting $11,432, continued its rise toward $20,000 until reaching that figure 13 years later.

However, it dropped back below the $20,000 mark in the wake of the economic downturn, sparked by the bankruptcy of Lehman Brothers.

The finance ministry forecast last week that the economy will grow 5.8 percent this year, a sharp rise compared to its earlier projection, reflecting the fast-rebounding economic indicators.

Based on this, the government believes that the GNI is expected to increase by $100 to $200.

Growth of foreign investment in the local financial market will contribute to the rising GNI.

The won-dollar exchange rate averaged 1,276 won last year, while that for 2010 is estimated at around 1,200. As shown in the sinking of the naval ship Cheonan, which affected foreign investors' confidence, resulting in a weaker won, geopolitical issues can always affect the forecast, ministry officials said.

In addition, the eurozone's lingering debt crisis and inflationary pressure, ignited by the long-standing low-rate policy, can also serve as key hurdles en route to reaching the goal, they said.