Korea’s per capita GDP faces fresh challenges after a new forecast by the International Monetary Fund. In its latest World Economic Outlook report, the IMF projected Korea’s per capita GDP to hit $34,642 in 2025. This figure marks a notable 4.1 percent decline compared to the previous year. Moreover, the IMF now predicts that Korea will reach the $40,000 mark only in 2029. This is a two-year delay compared to the earlier 2027 projection made just six months ago.
Several factors have influenced the downward revision of Korea’s per capita GDP. Economists point to the weakening Korean won and the continued strength of the US dollar. Paik Seok-hyun from Shinhan Bank explained that exchange rate fluctuations impact dollar-based GDP calculations significantly. Other reasons, such as slow domestic consumption recovery and political instability, also play smaller roles. Nevertheless, the currency depreciation stands as the major driver behind the gloomy revision.
Korea’s per capita GDP decline coincides with economic instability following political unrest. The Korean won lost nearly 9 percent of its value since October, following President Yoon Suk Yeol’s emergency martial law declaration. Analysts also warn about US tariff measures that could further dampen Korea’s growth. The IMF sharply reduced Korea’s 2025 economic growth forecast to just 1 percent, down from 2 percent earlier this year. These projections underline persistent economic uncertainty facing the country in the near future.
Historical data highlights the inconsistency in Korea’s per capita GDP performance. The figure reached $33,653 in 2020 and rose to $37,518 in 2021 before falling again in 2022. Despite some recovery in 2023 and 2024, future forecasts suggest ongoing volatility. Taiwan, meanwhile, is expected to catch up, with its per capita GDP rising to $36,319 next year. Korea, although slightly ahead now, might soon face competition in maintaining regional economic leadership.
Despite the challenges, Korea’s per capita GDP should remain higher than Japan’s for the foreseeable future. Korea first surpassed Japan in 2022, and the IMF believes this trend will continue through at least 2030. Nevertheless, Taiwan’s rapid gains could challenge Korea’s position starting next year. Economists urge Korea to focus on stabilizing its currency and boosting internal economic resilience. Many now watch closely how Korea will navigate these rough waters to reclaim stronger growth.
