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According to Yonhap News,
(SEOUL=Yonhap News) Korea’s gross domestic product (GDP) at purchasing power parity (PPP) per capita will outpace that of Japan in 2016 as it nears the USD 40,000 level, an analysis shows.
The Hyundai Research Institute published a report on Korean trends for 2015 and forecasted that Korea’s GDP per capita will surpass Japan’s in 2016, which would be an extraordinary achievement and one that would come in just 70 years since Korea’s liberation from Japanese occupation.
Based on the PPP statistics of the International Monetary Fund, the report says that Korea’s GDP per capita (USD 38,760) will catch up with Japan’s (USD 39,108) in 2015 and exceed it in 2016, the figures being USD 39,828 and USD 39,669, respectively.
The report points out that the gap in potential growth rate between Japan and Korea will increase, as Japan’s potential growth rate is around 0 percent while Korea’s is around 3 percent. To avoid a long-term recession like that of Japan, Korea should enhance its growth potential, improve its economic fundamentals and increase the quality of life of its people.
Once the free trade agreement between Korea and China goes into effect in 2015, the “ChiKorea 2.0 era” will begin. It will be an era in which bilateral economic exchanges will expand and political, diplomatic and cultural cooperation will grow.
With sluggish exports expected due to the continued low growth of the global economy, the report says a virtuous economic cycle in which an increase in household income leads to consumption, production, investment and expansion, should be enhanced.
The report analyzes that Korea’s export portfolio will undergo a substantial change. It also forecasts that Korea’s exports to the United States and ASEAN will expand while exports to Japan and the EU will decrease. Exports of the IT and automobile industries will be similar to levels this year while the exports of petroleum products, shipbuilding and steel industries will see a reduction.
The report also says that the employment environment will see a shift from growth without employment to employment without growth, from a shortage of jobs to a shortage of workforce and from the manufacturing industry to the service industry.
The report suggests preparing an innovative policy to reorganize Korea’s manufacturing industry, which is in an unstable position due to the manufacturing industries of advanced countries and China.
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Source: Yonhap News (December. 20, 2014)
** This article was translated from the Korean.