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IMF pushes back GDP per capita milestone for Korea by 2 years

Published: 28 Apr. 2025, 18:26

A store is shut down and up for rent in Jongno District, central Seoul, on April 28. [NEWS1]

The International Monetary Fund (IMF) has pushed Korea's projected growth back by two years.

The achievement of a GDP per capita of $40,000, originally forecast for 2027, is now projected to be delayed until 2029, according to the latest projection by the IMF.

The delay is attributed to a slowdown in growth to the one percent range and the depreciation of the Korean won. Starting next year, Taiwan is also expected to surpass Korea in per capita GDP.

According to the IMF’s World Economic Outlook report released earlier this month, Korea’s GDP per capita for this year is estimated at $34,642. This figure represents a 4.1 percent decrease from last year and falls below the 2022 level of $34,822.

The IMF now expects Korea to surpass the $40,000 mark in per capita GDP by 2029, reaching $40,340, rather than in 2027 as previously forecast.

Cargo is stacked at the Pyeongtaek Port in Gyeonggi on April 24. [NEWS1]

In its earlier report released on Oct. 22 last year, the IMF had projected Korea’s per capita GDP would reach $41,031 in 2027, crossing the $40,000 threshold. This means the timeline has been pushed back by two years in just six months.

Korea first surpassed the $30,000 mark in 2014 but has struggled to climb beyond $40,000 for more than a decade.

The IMF also forecasts that starting next year, Korea’s per capita GDP will fall behind that of Taiwan, which is projected to reach $36,318 in 2026, outpacing Korea’s expected $35,880 for the same year.

The delay in surpassing the $40,000 threshold and the expected reversal with Taiwan are largely due to low growth and a high exchange rate.

The IMF lowered Korea’s growth forecast for this year from 2 percent to 1 percent, the sharpest downgrade among major economies. In contrast, Taiwan’s economy is expected to grow by 2.9 percent over the same period. By 2026, Korea’s growth rate is expected to remain at 1.4 percent, while Taiwan’s is forecast at 2.5 percent.

An illustration of slower economic growth [JOONGANG ILBO]

Per capita GDP figures are calculated in U.S. dollars, and the Korean won has weakened more sharply than most major currencies, widening the gap to the $40,000 milestone.

Meanwhile, Japan, which Korea surpassed in 2022, is expected to remain behind Korea through 2030, according to the IMF. Japan’s per capita GDP is forecast to reach $33,956 this year and $35,653 next year. Japan first crossed the $30,000 mark in 1992 and exceeded $40,000 in 1995, but fell back into the $30,000 range by 2022.

"The delayed achievement of a $40,000 GDP per capita is fundamentally due to a decline in the growth rate," said Jung Kyu-chul, a senior fellow at the Korea Development Institute. "Korea’s potential growth rate is also weakening, and we must be vigilant against structural low growth."

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM YEON-JOO [[email protected]]