Korea drops out from top 10-largest economies on slow growth, strong dollar

South Korea’s economy dropped outside the world’s top ten largest rankings in 2022, primarily due to sluggish growth and a strong dollar.

According to the Bank of Korea on Wednesday, Korea’s nominal gross domestic product (GDP) amounted to $1.67 trillion last year, making it the 13th largest in the world. This marked the first time in three years that South Korea slipped below the 10th spot, after holding the position for two consecutive years in 2020 and 2021.

The primary factor contributing to the decline is believed to be the significant weakening of the Korean won last year. The won depreciated by 12.9 percent against the dollar, resulting in the country’s nominal GDP reaching 216.1 trillion won, reflecting a 3.9 percent increase compared with a year before, but a 7.9 percent decrease in U.S. dollar terms.

Korea is not expected to enter the top 10 economies this year either, due to its low economic growth rate estimated to be in the low-to-mid 1 percent range, combined with the continued strength of the dollar. In April, the International Monetary Fund (IMF) predicted that Korea’s GDP would reach $1.72 trillion this year, the 12th largest economy in the world.

Meanwhile, on a global scale, resource-rich countries such as Russia, Brazil and Australia have emerged as leading nations with some of the largest nominal GDPs in the world last year.