Korea sees 3rd-largest GDP per capita fall among major economies in 2022

Strong dollar, oil price spike led to the decline, BOK says

(Yonhap)

South Korea saw the third-largest decline in gross domestic product per capita among major economies in 2022 amid a strong US dollar, data released on Wednesday showed.

The country's GDP per capita fell 8.2 percent to record $32,142 in 2022 when compared to the year earlier, when it posted $34,998, according to data compiled by the Bank of Korea that was based on information from the Organization for Economic Cooperation and Development and the World Bank.

The decline was the third largest after Japan and Sweden, which posted a 15.1 percent and 8.5 percent fall respectively, in the list of 47 countries that include the world's top 30 economies and OECD member countries, according to the data released by Rep. Jin Sun-mee of the main opposition Democratic Party.

Bank of Korea attributed the sharp fall in Korea's GDP per capita to the increase in the value of the dollar and surge in oil prices.

“The biggest factor behind the sharp drop is the weakness of the Korean won against the US dollar, which has risen 12.9 percent (against the Korean won)," a BOK official said.

When measured in Korean won, Korea's nominal GDP in 2022 increased by 3.9 percent on-year to reach 2,161.8 trillion won. But in terms of US dollar, the figure recorded a fall of 7.9 percent to stand at $1.68 trillion. The decline in dollars marked the most significant fall, following Japan's, among the 42 countries with data available.

Korea landed at No. 13 with its nominal GDP, three notches down from the previous year.

BOK Gov. Rhee Chang-yong explained in a press briefing last month that the elevated oil price largely led to the significant deprecation of the won against the dollar.

"Those countries that witnessed their ranks go up such Brazil, Russia and Australia, were less impacted by the exchange rate as they are energy producers and exporters," Rhee said at the time.

While the International Monetary Fund raised the global economic growth forecast by 0.2 percentage point to 3 percent for 2023, it reduced the figure for Korea by 0.1 percentage point, to 1.4 percent, citing "persistent challenges" in the global economy. This marked the fifth consecutive time the IMF has revised down the country's growth outlook.

By Moon Joon-hyun(mjh@heraldcorp.com)