Last Year's Per Capita Gross National Income $31,755... Growth Rate -1.0% (Comprehensive)

Gross National Income per Capita Down 1.1% Year-on-Year... Decline for 2 Consecutive Years
"Warning of Trend Decline if Decrease Continues for 3 Years"

[Image source=Yonhap News]

[Asia Economy Reporters Eunbyeol Kim, Sehee Jang] Last year, the Gross National Income (GNI) per capita decreased for the second consecutive year. Although the $30,000 range was maintained, the per capita GNI decline was inevitable due to the reduction in Gross Domestic Product (GDP) caused by the COVID-19 pandemic. This marks the first time since the financial crisis in 2008 and 2009 that per capita GNI has fallen for two consecutive years.

According to the "2020 Q4 and Annual National Income (Provisional)" report released by the Bank of Korea on the 4th, the per capita GNI was $31,755, down 1.1% from the previous year. In 2019, the per capita GNI had decreased by 4.3% to $32,115.

Per capita GNI is an indicator showing the average living standard of a country's citizens, calculated by dividing nominal gross national income by the estimated population from Statistics Korea and reflecting the won-dollar exchange rate. South Korea first entered the $30,000 range in 2017 with $31,734, increased to $33,564 in 2018, but then declined again in 2019.

In Korean won terms, per capita GNI was 37,473,000 won, a 0.1% increase from the previous year.

Nominal GDP, adjusted for inflation, was 1,924.5 trillion won last year, up 0.3% from the previous year. The nominal GDP growth rate exceeded the real GDP growth rate (-1.0%). With the improvement in nominal GDP growth, the GDP deflator (nominal GDP/real GDP) recorded a 1.3% increase last year. Although the GDP deflator was negative (-0.9%) in 2019, it reversed to positive growth last year.

The annual total savings rate last year was 35.8%, up 1.2 percentage points from 34.7% the previous year, and the gross domestic investment rate rose 0.2 percentage points from 31.2% to 31.4%.

Meanwhile, South Korea's real GDP growth rate (provisional) last year was -1.0%, the same level as the preliminary figure announced in January. The real GDP growth rate for Q4 last year (provisional) was 1.2%, revised upward by 0.1 percentage points from the preliminary figure of 1.1%. This was due to upward revisions in exports (0.3 percentage points), facility investment (0.1 percentage points), and private consumption (0.1 percentage points).

Private consumption decreased by 1.5% as both services and goods declined, and government consumption also fell by 0.5%, mainly due to reduced spending on goods and health insurance benefits. Construction investment increased by 6.5% due to growth in building and civil engineering construction, while facility investment decreased by 2.0% as machinery increased but transportation equipment declined.

Exports rose by 5.4%, centered on semiconductors and chemical products, while imports increased by 2.2%, driven by machinery and equipment and primary metal products.

Regarding this, Professor Donghyun Ahn of Seoul National University's Department of Economics said, "The income growth rate that people feel is continuously falling," adding, "Ultimately, there is a risk of a vicious cycle where economic growth declines due to contraction in consumption and investment." He further noted, "If the gross national income decreases again this year, it should be seen as a downward trend."