[Asia Economy Reporter Park Byung-hee] Bloomberg reported on the 25th (local time) that South Korea's per-capita income likely surpassed Italy's last year.
According to the World Bank, South Korea's per-capita income was $33,790 in 2019, which was not significantly different from Italy's $34,530. Bloomberg anticipated a reversal in per-capita income between South Korea and Italy, noting that Italy's economy contracted by 9% last year while South Korea's economy shrank by only 1%. It added that this is the first time South Korea's per-capita income has surpassed that of the Group of Seven (G7) member countries.
The Bank of Korea will release the preliminary figures for the 'Q4 2020 and annual real Gross Domestic Product (GDP)' on the 26th.
Bloomberg reported that Q4 GDP last year decreased by 0.9%, and the annual GDP contracted by 1%. It explained that the 1% decline is a better outcome than the Bank of Korea's forecast of a 1.1% decrease. It also noted that this is the best performance among the Organisation for Economic Co-operation and Development (OECD) member countries.
Bloomberg diagnosed that exports played a pillar role in supporting South Korea's economy last year, which helped the economic scale and income level shrink less compared to G7 countries. It predicted that exports will continue to support South Korea's economy this year as well. With the increase in remote work and children studying at home instead of attending school, demand for the latest electronic devices and semiconductors is expected to rise.
However, Bloomberg pointed out that the strong export performance has not translated into domestic demand expansion, and the fact that jobs have decreased the most since 1999 is an economic threat. It also highlighted the problem that the recovery is likely to be a K-shaped recovery, characterized by an uneven recovery and widening income disparity, rather than a V-shaped recovery.
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