$30,000 per capita income may be 10 years away

Korea might need 10 more years to see its per capita income exceed $30,000 as a protracted low growth trend and other economic structural problems are dimming the overall outlooks, a private think tank said yesterday.

Korea’s per capita income seems to be “trapped” in the $20,000 range five years after it surpassed the mark for the first time in 2007, as the growth rate has remained stagnant over the past years, according to a report by the Hyundai Research Institute (HRI).

From 2007 to 2011, the country’s per capita gross domestic product (GDP) grew at an annual average of 1 percent.

“If the growth rate remains below 3 percent on the assumption that the won-dollar exchange rate will stay on a fixed range, it will take an additional 10 years for us to see the income exceed the $30,000 mark,” the report said.

Most advanced countries saw their per capita income jump from $20,000 to $30,000 in about eight years. If the HRI report’s assumption proves to be right, Korea will take about 15 years to reach the milestone.

The report attributed the gloomy outlooks to the country’s economic structural problems and other issues including ballooning household debts, anemic consumption and a wider gap between haves and have-nots.

The report also said growing demand for welfare spending by the political community will likely add to pressure on the next government, making it more difficult to attain a higher growth rate going forward.

Yonhap