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| People shop for groceries at a traditional market in Seoul, March 2. Yonhap |
Data shows country overtaken by Taiwan for 1st time in 20 years
By Yi Whan-woo
Korea's gross national income (GNI) per capita dropped nearly 8 percent last year, mainly due to a sharp depreciation of the Korean won against U.S. dollar, the Bank of Korea (BOK) said Tuesday.
GNI, which measures a country's wealth, is the amount of money earned by its people and businesses at home and abroad. It is comparable to gross domestic product (GDP), another gauge of national wealth that measures the monetary value of final goods and services produced within a country.
In its preliminary data, the central bank said GNI per capita slid 7.7 percent year-on-year to $32,661 in 2022.
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The 2022 reading also retreated from the GNI per capita level in 2021, when it surpassed the $35,000 mark for the first time as the Korean economy began to recover and the local currency gained about 3 percent of its value against the greenback.
In 2022, however, the Korean won depreciated 12.9 percent against the dollar due to an aggressive U.S. monetary tightening cycle that prompted a capital flight from Korea in search of safe haven assets.
Plus, the Korean economy reeled from dwindling exports and private spending ― the twin engines of growth ― as global demand weakened and inflation added to the woes of the people's livelihood.
On an annual average, the Korean currency retreated to 1,292 won per dollar in 2022 from 1,144 won per dollar 2021.
The won's depreciation was singlehandedly responsible for a $4,207 decline in GNI per capita from a year earlier, offsetting the effects of GDP growth, price increase of goods and population decline that collectively contributed to less than a $2,000 increase in 2022 GNI per capita.
Based on a country-to-country comparison, the BOK said Korea is likely to lag behind Taiwan in terms of GNI per capita for the first time in 20 years.
According to the Taiwanese statistics agency, the country's GNI amounted to $33,565 per capita in 2022.
The BOK attributed Taiwan's performance to a relatively smaller depreciation of its currency against the dollar compared to Korea.
Its official currency ― New Taiwan dollar ― lost 6.8 percent of its value against the greenback on average a year.
The BOK still noted that it is too early to affirm Taiwan is leading Korea as each country refers to different factors in calculating GNI. The central bank added it will wait for data to be released from the World Bank, OECD and other international financial institutions for a more accurate comparison.
Asked whether Korea's GNI per capita can reach $40,000 as pledged by President Yoon Suk Yeol, the BOK said the possibility remains under certain preconditions.
These preconditions include: at least 2 percent growth in annual GDP, inflation of 2 percent or less every year and a won-dollar exchange rate of 1,145 won per dollar.
Meanwhile, the GDP growth rate for all of 2022 and the final three months of the year remained unchanged at 2.6 percent and 4.1 percent, as estimated by the BOK in December.
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