Korea's GNI beats Japan's for first time ever as yen plummets

Economy

Korea's GNI beats Japan's for first time ever as yen plummets

Published: 05 Jun. 2024, 18:30

SHIN HA-NEE
shin.hanee@joongang.co.kr

Choi Jung-tae, head of national accounts at the Bank of Korea (BOK), speaks during a press briefing held at the central bank in central Seoul on Wednesday. [BOK]

Korea’s gross national income (GNI) per capita outpaced Japan's for the first time ever last year due to a weak yen, according to updated data from the Bank of Korea (BOK).

The Korean central bank announced Wednesday that it had revised the reference year for the country's national account from 2015 to 2020. The adjusted results put Korea in 12th place in terms of nominal GDP, according to the bank, an improvement from its previous result.

A reference year serves as a base point for calculating economic indicators, such as GDP and GNI, for accurate comparison of data between years. A base year revision occurs every five years to incorporate changes in economic structure and ensure comparability between results. The latest adjustment is the 13th of its kind.

The update brought last year's per capita GNI to $36,194, adjusted upward from the previous $33,745 following the base year of 2015. It also upped the annual growth rate by 0.2 percentage points to 4.7 percent.

“As of 2023, the [GNI per capita] figure is lower than Italy's, yet higher than [those of] Taiwan and Japan,” said Choi Jung-tae, head of the BOK’s national accounts coordination team, during a press briefing Wednesday.

“Based on data we have gathered so far, Japan is estimated to be ranked lower than Korea in GNI per capita as its currency depreciation against the U.S. dollar continued from 2022 through 2023,” Choi said.

Choi projected Korea’s per capita GNI to hit the $40,000 milestone “in a few years, as long as the currency rate stays stable.”
Korea’s GNI per capita was initially estimated to have reached the $30,000 mark in 2017 for the first time. However, the milestone was achieved in 2014 under the revised national account data,

Last year's nominal GDP was updated to 2,401 trillion won ($1,749 billion) from the previous figure of 2,236 trillion won measured with 2015 as the reference year.

The BOK also released quarterly national income data showing that Korea's GNI grew 2.4 percent to 567.5 trillion won during the January-March period from the previous quarter, outpacing its economic growth of 1.3 percent.

The quarterly growth rate marked the steepest since the 2.8 percent rate logged in the first quarter of 2016.

The real GDP gained 1.3 percent, consistent with the preliminary figure announced in the central bank’s advance estimate in April, marking the steepest growth since the 1.4 percent logged in the fourth quarter of 2021.

While the latest GDP growth figure remained unchanged from the advance estimate announced on April 25, the quarterly growth rate of private consumption was updated from the initial estimate of 0.8 percent to 0.7 percent, exports from 0.9 percent to 1.8 percent and construction investments from 2.7 percent to 3.3 percent.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]