Canada Wood Today | The Canada Wood Group

Korea Economy Update

Tai Jeong

By Tai Jeong

Country Director, Canada Wood Korea

April 5, 2019

South Korea’s economy grew 2.7% in 2018, marking a six-year low amid sluggish investments, but its gross national income per capita, a gauge of the population’s purchasing power, exceeded the $30,000 mark for the first time – be more specific, $31,349, up 5.4% on-year.

The latest figures are considered crucial for the South Korea economy amid the prolonged slow economic growth, as the $30,000 mark is generally considered an entry line for top-tier economies.
South Korea ranked 9th in per capita GNI among countries with 20 million or more people, standing next to the US, Japan, Britain, France, Germany, Canada, Austria, and Italy.

On GDP growth, facility investment fell to a nine-year low of 1.6% in 2018 as cooling global demand for semiconductors discouraged companies from expanding their factory lines.

Construction investment tumbled 4% as the Seoul government has been making efforts to calm down the overheated housing market. The 4% drop marked the sharpest contraction since 1998 when the sector plunged 13.3% amid the Asian financial crisis.

The construction sector retreated 4.2%, marking the first negative growth since 2012, while services rose 2.8% in 2018.

Private spending rose 2.8%, the highest in seven years, while government spending jumped by an 11-year high of 5.6% in 2018 on its efforts to prop up the economy.

Exports, which account for around 50% of the GDP, rose 4.2%, up from a 1.9% increase in 2017, while growth in imports slowed down to 1.7% from 7%.

The exchange rate for Canadian Dollar averaged at 848.98 won in February 2019, down by 1.17% from 859.00 in February 2018 and slightly up by 0.76% from 842.59 in the previous month.