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Panorama econòmic

Economic indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Ranking 10th among the world's largest economic powers and 4th in Asia in 2022, South Korea is famous for its spectacular rise from one of the poorest countries in the world to a developed, high-income country in just one generation. During the global financial crisis of 2007-2008, the country maintained a stable economy and even experienced economic growth during the peak of the crisis. However, the South Korean economy went into its worst year growth period in more than half a century in 2020, battered by China's economic slowdown and uncertainties over the trade war between Beijing and Washington, and the global effects of the COVID-19 pandemic. Stagnant investment and the failure to spill the boom of chip sector over into other industries already limited economic growth to an estimated 2.2% in 2019, before declining to -0.9% in 2020 and bouncing back at 4.3% in 2021. According to the IMF's October 2021 forecast, GDP growth is expected to reach 3.3% in 2022 and stabilise at 2.8% in 2023, subject to the post-pandemic global economic recovery.

Despite stimulus packages, public finances have deteriorated in 2020 and 2021. The budget surplus decreased from 0.5% of GDP in 2019 to -1.5% in 2020 and 12.5% in 2021. The IMF expects the fiscal deficit will remain at -2.6% in 2022 and reach -2.3% in 2023. Public debt grew to an estimated 51.3% of GDP in 2021 and is expected to rise in the coming years at 55.1% in 2022 and 58.5% in 2023 (IMF, October 2021). Inflation is projected to stand at 1.6% in 2022, compared to 2.2% in 2021 and 0.5% in 2020. Over 2020 and 2021 the government has worked hard to boost the economy through expansionary fiscal spending, and as a result employment data showed an improvement in terms of both the number of jobs and employment status. Framework measures for industrial innovation have been completed, which cover the plans to restructure manufacturing and services, develop the new core industries of data, networks and AI, and promote the three new promising industries of a system on a chip, biohealth and future cars. The government also worked for a second venture boom, strong employment support and social safety nets, which led to improved distribution indicators, and supplementary measures to help the 52 hour workweek run smoothly. However, the private sector has not yet picked up, as well as the country's growth potential. Exports have bounced back, led by semiconductors and automobiles. Investment has held up relatively well so far, despite weak demand and high uncertainty (OECD, 2021). Corporate debt represented 101.7% of GDP in 2019 (Korea Institute of Public Finance, 2020), rising 6.3 percentage points from the previous year, the second largest increase in the world, and the high level of household debt poses a risk to the banking sector.

In 2022, the country’s most immediate challenge remains related to the economic, social and public health impacts of the COVID-19 pandemic. South Korea has experienced remarkable success in combining rapid economic growth with significant reductions in poverty. Income per capita increased from USD 100 in 1963 to more than USD 31,762 today (IMF, October 2021). Although the unemployment rate was estimated very low in 2021 at 3.8% (IMF, October 2021) the number of irregular workers is very high, social inequalities are deepening and social ties are deteriorating. The government is struggling to turn employment around, even after using USD 400 million extra budget mainly for job-creation projects and is urging pension funds to invest more in small-cap Kosdaq stocks to boost innovation. In the medium and longer terms, South Korea will spend more on preparing measures to tackle the low birth rate, elderly poverty and low employment among women. The IMF expects however the unemployment rate to remain slightly affected by the negative economic impact of the COVID-19 pandemic, the rate being currently estimated to stay at 3.7% in 2022.

 
GDP Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 1,651.421,638.26e1,823.851,907.662,012.10
GDP (constant prices, annual % change) 2.2-0.9e4.03.02.9
GDP per capita (USD) 31,937e31,638e35,19636,79238,791
General government balance (in % of GDP) 0.5-1.5e-2.5-2.6-2.3
General government gross debt (in % of GDP) 42.147.9e51.355.158.5
Inflation rate (%) 0.40.5e2.54.02.4
Unemployment rate (% of the labor force) 3.83.9e3.83.73.7
Current Account (billions USD) 59.6875.2881.2879.7583.91
Current account (in % of GDP) 3.64.64.54.24.2

Font: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated data

 
Monetary indicators 20162017201820192020
South Korean Won (KRW) - Average annual exchange rate for 1 EUR 1,234.331,276.941,298.531,309.441,348.10

Font: World Bank, 2015

 

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Actualitzacions: September 2022

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