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South Korea outstrips OECD average in per capita GDP for first time

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The Chateau de la Muette, headquarters of the Organisation for Economic Cooperation and Development (OECD), in Paris, France. AFP

South Korea outstrips OECD average in per capita GDP for first time

South Korea has surpassed the average of members of the Organisation for Economic Cooperation and Development (OECD) in gross domestic product (GDP) per capita, for the first time, data showed on January 10.

According to the French-based organisation, South Korea ranked 18th among the 38 members in GDP per capita with $45,363 in 2020. This exceeded the estimate of the OECD average at $45,182, while the nation had continued to stay under the average for decades.

Figures for South Korea and the OECD average were $18,539 versus $24,635 in 2000, $31,737 versus $34,539 in 2010 and $43,250 versus $46,329 in 2019.

In retroactive research by the organisation, South Korea’s per capita GDP stayed at almost half of the OECD average in 1990 – $8,355 versus $16,527.

In 2020 South Korea placed above New Zealand (19th) with $44,025, Japan (20th) with $42,442, Italy (21st) with $41,987, Israel (23rd) with $40,151 and Spain (26th) with $37,840.

South Korea, whose per capita GDP topped the $40,000 mark in 2017, overtook Italy, Japan and New Zealand over the past three years, OECD data showed. South Korea ranked above Japan for the third consecutive year dating to 2018, which marked the first time in their history.

Luxembourg topped the list with $117,958 in 2020, followed by Ireland with $93,639, Switzerland with $71,832, the US with $63,285 and Norway with $62,777.

The others in the top 10 list included Denmark, the Netherlands, Australia, Austria and Sweden. These countries posted figures between $55,000 and $61,000.

Among the next on the list were Germany, Iceland, Belgium, Finland, France, the UK and Canada, whose rankings were from 11th to 17th in turn.

The figures are calculated on the basis of purchasing power parity (PPP), as an adjustment for differences in the cost of living in each country worldwide and the currency value versus the US dollar. So the PPP-based

figure is different from the nominal-based GDP per capita.

According to a recent analysis – the World Economic Outlook – by the International Monetary Fund, South Korea was still outstripped by Japan in the nominal GDP per capita by $35,195 versus $40,704.

While the OECD comparison could suggest that ordinary people’s purchasing power in South Korea is better than that of Japan, the world’s third-largest economy, a main problem is that South Korea is walking in Japan’s footsteps in terms of demographic structure.

Concerning people aged 70 or over, one out of every five Japanese are in their 70s or over, with one in 10 South Koreans in the corresponding age group. The growing portion of elderly population could certainly restrict the growth of GDP per capita.

The pace in South Korea is noteworthy as the portion of those aged 70 or above has surged nearly three percentage points in a decade – from 6.8 per cent of the population in 2010 to 10.7 per cent to 2020.

THE KOREA HERALD/ASIA NEWS NETWORK

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