KOREA TRAILS TAIWAN IN PER CAPITA GNI

[Anchor Lead]

Korea's per capita gross national income in 2022 stood at roughly 32,600 dollars, overtaken by Taiwan for the first time in 20 years. This is mostly attributable to the rising won-Dollar exchange rate, but some point out the exchange rate isn't the only reason.

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South Korea's per capita gross national income in 2022 stood at roughly 32,600 dollars, falling more than 7% from the previous year. During the same period, Taiwan recorded about 33,500 dollars, 900 dollars more than Korea. Korea's per capita GNI was overtaken by Taiwan for the first time in 20 years. Rising won-USD exchange rate is seen as the key contributing factor, at least for last year. Early last year the won-dollar exchange rate was not even 1,200 won per dollar. But the rate soared to mid-1,400 won in September, recording an average increase of 13% on-year, nearly twice that of Taiwan. The higher the exchange rate, the lower the GNI tabulated in US dollars.

[Soundbite] Choi Jung-tae(Bank of Korea) : "Last year, Taiwan’s exchange rate rose 6.8%. Korea’s exchange rate rose by 12.9%. This difference caused the change in GNI."

But in the long term, Taiwan's growth played a big part. While Korea's growth stalled once the country surpassed the 30,000-dollar mark in 2017, Taiwan, behind by 6,000 dollars at the time, quickly caught up. A comparison of the nominal GDP growth, a reliable gauge of a country's economy size, also shows that Taiwan has overtaken Korea every year from 2020 to 2022. Taiwan's GDP growth is attributed to the spiking sales of its semiconductor maker TSMC while the global semiconductor supply was disrupted during the pandemic.

[Soundbite] Kim Yang-paeng(Korea Institute for Industrial Economics and Trade) : "TSMC was producing at an average 20~30% knockdown price. But the price was normalized after the pandemic and then raised once again by 20% after that."

Korea's per capita GNI was expected to reach 40,000 dollars soon, but that can only be achieved when the Korean economy grows as projected by the Bank of Korea and the won-dollar exchange rate drops even further.