South Korea’s GDP growth outlook indicates a slower climb toward the long-anticipated $40,000 per-capita milestone, according to recent government data. Officials project that, at the current pace, the target will be achieved in 2027, though currency weakness could delay it to 2028. The Finance Ministry’s latest five-year forecast expects nominal GDP to expand steadily, but exchange rate volatility remains a key risk. Policymakers view sustaining growth as essential for maintaining competitiveness and household wealth in an increasingly challenging global environment.
According to the estimates, Korea’s per-capita GDP will likely reach $37,400 this year and rise to $38,900 in 2026. The figure is forecast to surpass $40,000 two years later, eventually climbing to $42,200 in 2028 and $44,000 in 2029. However, maintaining this trajectory has proven difficult, as Korea has missed several past targets. After exceeding $30,000 in 2016, expectations suggested $40,000 by 2023, yet global headwinds derailed that timeline. The pandemic, slowing demand, and interest rate hikes all contributed to weaker performance.
Historical data shows volatile progress. Per-capita GDP rose to $37,500 in 2021 after stimulus measures and post-pandemic recovery, but it slipped below $35,000 in 2022. Rising borrowing costs and weak domestic consumption pressured growth, while external uncertainty limited export gains. The new GDP growth outlook assumes last year’s average exchange rate of 1,364 won per dollar, yet the won’s recent slide has clouded projections. The currency averaged 1,414 per dollar this year, briefly nearing 1,500 before settling near 1,390.
If the won remains soft, per-capita GDP could fall just shy of $40,000 in 2027, landing around $39,800. A firmer exchange rate would allow Korea to surpass the mark and reach about $41,400 in 2028. Analysts caution that exchange rates, trade disputes, and political tensions could all affect future calculations. Ensuring steady nominal growth will require strong domestic demand and support for high-value industries, such as technology and advanced manufacturing.
Meanwhile, Taiwan’s rapid expansion is reshaping regional competition. Officials there expect nominal per-capita GDP to top $38,000 this year, overtaking Korea for the first time in over two decades. Taiwan’s strong semiconductor exports and robust second-quarter GDP, up 8 percent year-on-year, contrast sharply with Korea’s 0.6 percent gain. Economists note that Taiwan has outpaced Korea in real growth every year since 2019. Korea’s economy grew only 2 percent in 2024, with forecasts for slower gains this year.
Looking ahead, experts stress the need for policies supporting productivity, investment, and wage growth to sustain the GDP growth outlook. Authorities may need to bolster currency stability and encourage innovation to achieve higher living standards. Strengthening global competitiveness remains vital as Korea strives to maintain its edge amid shifting regional dynamics.
