Korea South Economy - 2022

GEOGRAPHICAL NAMES 

Economic overview

After emerging from the 1950-53 war with North Korea, South Korea emerged as one of the 20th century’s most remarkable economic success stories, becoming a developed, globally connected, high-technology society within decades. In the 1960s, GDP per capita was comparable with levels in the poorest countries in the world. In 2004, South Korea's GDP surpassed one trillion dollars.

 

Beginning in the 1960s under President PARK Chung-hee, the government promoted the import of raw materials and technology, encouraged saving and investment over consumption, kept wages low, and directed resources to export-oriented industries that remain important to the economy to this day. Growth surged under these policies, and frequently reached double-digits in the 1960s and 1970s. Growth gradually moderated in the 1990s as the economy matured, but remained strong enough to propel South Korea into the ranks of the advanced economies of the OECD by 1997. These policies also led to the emergence of family-owned chaebol conglomerates such as Daewoo, Hyundai, and Samsung, which retained their dominant positions even as the government loosened its grip on the economy amid the political changes of the 1980s and 1990s.

 

The Asian financial crisis of 1997-98 hit South Korea’s companies hard because of their excessive reliance on short-term borrowing, and GDP ultimately plunged by 7% in 1998. South Korea tackled difficult economic reforms following the crisis, including restructuring some chaebols, increasing labor market flexibility, and opening up to more foreign investment and imports. These steps lead to a relatively rapid economic recovery. South Korea also began expanding its network of free trade agreements to help bolster exports, and has since implemented 16 free trade agreements covering 58 countries—including the United State and China—that collectively cover more than three-quarters of global GDP.

 

In 2017, the election of President MOON Jae-in brought a surge in consumer confidence, in part, because of his successful efforts to increase wages and government spending. These factors combined with an uptick in export growth to drive real GDP growth to more than 3%, despite disruptions in South Korea’s trade with China over the deployment of a US missile defense system in South Korea.

 

In 2018 and beyond, South Korea will contend with gradually slowing economic growth - in the 2-3% range - not uncommon for advanced economies. This could be partially offset by efforts to address challenges arising from its rapidly aging population, inflexible labor market, continued dominance of the chaebols, and heavy reliance on exports rather than domestic consumption. Socioeconomic problems also persist, and include rising inequality, poverty among the elderly, high youth unemployment, long working hours, low worker productivity, and corruption.

Real GDP (purchasing power parity)

$2,187,800,000,000 (2020 est.)

$2,208,960,000,000 (2019 est.)

$2,164,810,000,000 (2018 est.)

note: data are in 2017 dollars

Real GDP growth rate

2.04% (2019 est.)

2.91% (2018 est.)

3.16% (2017 est.)

Real GDP per capita

$42,300 (2020 est.)

$42,700 (2019 est.)

$41,900 (2018 est.)

note: data are in 2017 dollars

GDP (official exchange rate)

$1,646,604,000,000 (2019 est.)

Inflation rate (consumer prices)

0.3% (2019 est.)

1.4% (2018 est.)

1.9% (2017 est.)

Credit ratings

Fitch rating: AA- (2012)

Moody's rating: Aa2 (2015)

Standard & Poors rating: AA (2016)

note: The year refers to the year in which the current credit rating was first obtained.

GDP - composition, by sector of origin

agriculture: 2.2% (2017 est.)

industry: 39.3% (2017 est.)

services: 58.3% (2017 est.)

GDP - composition, by end use

household consumption: 48.1% (2017 est.)

government consumption: 15.3% (2017 est.)

investment in fixed capital: 31.1% (2017 est.)

investment in inventories: 0% (2017 est.)

exports of goods and services: 43.1% (2017 est.)

imports of goods and services: -37.7% (2017 est.)

Agricultural products

rice, vegetables, cabbages, milk, onions, pork, poultry, eggs, tangerines/mandarins, potatoes

Industries

electronics, telecommunications, automobile production, chemicals, shipbuilding, steel

Industrial production growth rate

4.6% (2017 est.)

Labor force

26.839 million (2020 est.)

Labor force - by occupation

agriculture: 4.8%

industry: 24.6%

services: 70.6% (2017 est.)

Unemployment rate

3.76% (2019 est.)

3.85% (2018 est.)

Youth unemployment rate (ages 15-24)

total: 8.1%

male: 9.1%

female: 7.4% (2021 est.)

Population below poverty line

14.4% (2016 est.)

Gini Index coefficient - distribution of family income

35.4 (2015 est.)

31.6 (2012 est.)

Household income or consumption by percentage share

lowest 10%: 6.8%

highest 10%: 48.5% (2015 est.)

Budget

revenues: 357.1 billion (2017 est.)

expenditures: 335.8 billion (2017 est.)

Budget surplus (+) or deficit (-)

1.4% (of GDP) (2017 est.)

Public debt

39.5% of GDP (2017 est.)

39.9% of GDP (2016 est.)

Taxes and other revenues

23.2% (of GDP) (2017 est.)

Fiscal year

calendar year

Current account balance

$59.971 billion (2019 est.)

$77.467 billion (2018 est.)

Exports

$606.71 billion (2020 est.) note: data are in current year dollars

$660.51 billion (2019 est.) note: data are in current year dollars

$729.94 billion (2018 est.) note: data are in current year dollars

Exports - partners

China 25%, United States 14%, Vietnam 9%, Hong Kong 6%, Japan 5% (2019)

Exports - commodities

integrated circuits, cars and vehicle parts, refined petroleum, ships, office machinery (2019)

Imports

$540.96 billion (2020 est.) note: data are in current year dollars

$607.54 billion (2019 est.) note: data are in current year dollars

$649.23 billion (2018 est.) note: data are in current year dollars

Imports - partners

China 22%, United States 12%, Japan 9% (2019)

Imports - commodities

crude petroleum, integrated circuits, natural gas, refined petroleum, coal (2019)

Reserves of foreign exchange and gold

$389.2 billion (31 December 2017 est.)

$371.1 billion (31 December 2016 est.)

Debt - external

$457.745 billion (2019 est.)

$435.98 billion (2018 est.)

Exchange rates

South Korean won (KRW) per US dollar -

1,084.65 (2020 est.)

1,189.9 (2019 est.)

1,119.8 (2018 est.)

1,130.95 (2014 est.)

1,052.96 (2013 est.)

NOTE: The information regarding Korea South on this page is re-published from the 2022 World Fact Book of the United States Central Intelligence Agency and other sources. No claims are made regarding the accuracy of Korea South 2022 information contained here. All suggestions for corrections of any errors about Korea South 2022 should be addressed to the CIA or the source cited on each page.