Per-capita GDP to soon top $30,000

Economy

Published: 05 Dec. 2017, 20:00

Per-capita GDP to soon top $30,000

Korea’s per-capita gross domestic product (GDP) is expected to surpass $30,000 in 2018 on brisk exports of chips and other positives, Goldman Sachs said Tuesday.

“Unless there is any big change in Korean and global export conditions, Korea’s per-capita GDP will likely break the $30,000 level next year for the first time,” Goldman Sachs economist Kwon Goo-hoon said in a news conference on the country’s 2018 economic outlook.

Korea would achieve the landmark for the third time in Asia after Japan and Australia, and become the ninth country among the members of the Organization for Economic Cooperation and Development, he said.

Kwon pointed out that Korea is currently benefiting the most from the global economy driven by information and communication technology (ICT), which accounts for more than 10 percent of South Korea’s GDP.

Facebook, Amazon, Netflix, Google and other Internet giants have been investing more in data centers and software, which will likely boost exports of Korea’s semiconductor industry, the economist said.’

Korea’s domestic demand is projected to grow at a slightly faster pace in the new year than 2017, backed by increased fiscal spending, a hike in the minimum wage and a recovery in the tourism industry, he added.

Kwon, meanwhile, predicted the benchmark Kospi to reach the 2,900-point level in December next year thanks to a steady improvement in corporate earnings, with the Kospi’s return amounting to 14 percent in terms of the local currency.

Korea’s key interest rate may reach 2 percent at the end of next year, he said, adding it could rise to 2.5 percent should the economy expand faster than expected amid fast rising household debt and the bullish property market.

The economist predicted Korea’s economy to face such negative factors next year amid China’s policy toward the deployment of a U.S. missile defense shield here, faster-than-bargained inflation in advanced nations, risks from North Korea’s weapons programs and growing protectionism.

YONHAP