Per Capita GDP Slumps on High Exchange Rate... Even 2% Growth This Year Won’t Keep Korea Ahead of Taiwan

According to The Financial News, Korea’s per capita GDP last year is estimated to have stayed only in the mid‐$36,000 range. It is the first drop in three years, mainly due to a sharp depreciation of the won and slower growth. Even if the government meets its target of 2.0% growth this year, per capita GDP is projected to reach only the $37,000 range, roughly back to the 2021 level. In contrast, Taiwan, a key rival in the semiconductor industry, is expected to overtake Korea for the first time in 22 years and push its per capita GDP above $40,000 this year. With K‐shaped growth and widening income polarization becoming entrenched, calls are mounting to accelerate fundamental structural reforms in the economy, industry, and labor market.
On the 11th, the Ministry of Finance and Economy and other agencies estimated Korea’s per capita GDP for last year at $36,107, down 0.3% ($116) from a year earlier. This is the first time per capita GDP has fallen since 2022, a three‐year interval.
Last year, Korea’s nominal GDP converted into dollars came to $1.8662 trillion, a 0.5% decrease from the previous year. This is also the first decline since 2022, when it stood at $1.7987 trillion, again after three years.
The main reason is the persistently high won–dollar exchange rate in the 1,400‐won range since the second half of last year, which dragged down Korea’s per capita GDP.
The basis for calculating per capita GDP is last year’s nominal growth rate of 3.8%, presented in the 2026 economic growth strategy released on January 9. Applying that rate to the Ministry of Finance and Economy’s estimate of nominal GDP for 2024 (2,556.8574 trillion won) yields nominal GDP of 2,654.0180 trillion won for last year. This figure is then divided by last year’s average won–dollar exchange rate of 1,422.16 won and by the projected total population of 51,684,564.
As a result, last year’s real GDP growth is expected to have been just 1.0%, the lowest since 2020 (–0.7%). With the won–dollar rate at near‐record highs, GDP measured in dollars has shrunk even further.
Per capita GDP is likely to rise again this year, but the increase will probably be modest. The biggest swing factor is the exchange rate. If the average rate stays in the 1,420‐won range as it did last year, per capita GDP is projected at $37,932. If the won strengthens beyond that, per capita GDP could move up into the $38,000 range.
Korea first entered the $30,000 range in per capita GDP in 2016, at $30,839. It then climbed gradually to $35,359 in 2018. However, the COVID-19 pandemic, intensifying global competition in key industries, and sluggish domestic demand pushed the figure down for two consecutive years, to $33,652 in 2020. After the government rolled out a supplementary budget and exports increased, per capita GDP rebounded to $37,503 in 2021.
Since then, however, the economy has slipped into a prolonged slump, weighed down by a construction downturn, deteriorating manufacturing conditions, and rising prices. Per capita GDP fell back to $34,810, underscoring that growth has stalled, with the figure stuck in the $30,000 range for a decade.
Taiwan, riding the boom in Artificial Intelligence (AI) and a semiconductor supercycle, has seen its per capita GDP rise for four consecutive years. Last year, its per capita GDP was estimated at $38,478, far surpassing Korea’s. On the assumption that Korea achieves 2.0% growth this year, Taiwan’s per capita GDP would still be higher than Korea’s.
Taiwan has also sharply raised its forecast for real GDP growth last year, from 4.45% to 7.37%, an upward revision of nearly 3 percentage points. In growth terms, the gap with Korea, at 1.0%, has widened to more than 6 percentage points. On top of that, the New Taiwan dollar (TWD) has depreciated less than the won. Given these differences in exchange rates and growth, Taiwan is widely expected to stay ahead of Korea for quite some time.
The International Monetary Fund (IMF) projected last October that Korea’s per capita GDP will rank 37th in the world in 2025, down from 34th in 2024. By contrast, it forecast that Taiwan will move up from 38th to 35th, one notch above Korea.

skjung@fnnews.com Jung Sang-geun Reporter