Slowing growth and a weak won: South Korea overtaken by Taiwan

KOREA NOW

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Video Summary

South Korea's GDP per capita experienced its first decline in three years, dropping to $36,170 in the past year due to slowing economic growth and a significant depreciation of the won. This marks a reversal, with Taiwan now projected to surpass $40,000 in GDP per capita. Taiwan's economic surge is largely attributed to its dominant position in semiconductor exports, particularly driven by TSMC, and its benefit from the global AI boom, leading it to overtake South Korea in GDP per capita for the first time in 22 years. Despite the broader economic slowdown, South Korea's department store sector demonstrated resilience with double-digit sales growth in October and November, fueled by luxury purchases and foreign tourists. The nation's focus is now on whether improvements in key industries like semiconductors and shipbuilding can reverse the current economic downturn. An interesting fact is that South Korea's GDP per capita had briefly climbed to $37,530 in 2021.

Short Highlights

South Korea's GDP per capita fell by 0.3% to $36,170 last year, the first decline in three years.
Taiwan's GDP per capita is projected to exceed $40,000 this year, reaching an estimated $40,921.
Taiwan has overtaken South Korea in GDP per capita for the first time in 22 years, largely due to robust semiconductor exports from TSMC and the AI boom.
South Korea's department store sector showed resilience with double-digit sales growth in October and November, driven by luxury purchases and foreign tourists.
The nation's economic future hinges on whether improvements in semiconductors and shipbuilding can revive its current downturn.

Key Details

South Korea's GDP Per Capita Decline [00:00]

South Korea's GDP per capita declined for the first time in three years, reaching $36,170 last year, a 0.3% decrease from the previous year.
This downturn was influenced by slowing economic growth and a sharp depreciation of the South Korean won, which rose above 1,400 against the US dollar.
In 2021, the GDP per capita had reached $37,530, supported by quantitative easing and strong exports, but fell to $34,810 in 2022 due to surging inflation and interest rates.

"As of last year, South Korea's gross domestic product or GDP per capita declined for the first time in three years, weighed down by slowing economic growth and a sharp depreciation of the one."

Taiwan's Economic Ascent and Overtake [00:21]

Taiwan is on an upward economic trajectory, with its GDP per capita expected to surpass $40,000 this year, projected at $40,921.
Last year, Taiwan's GDP per capita stood at approximately $38,000.
Taiwan's rapid economic gains are attributed to strong semiconductor exports, particularly from TSMC, benefiting significantly from the global artificial intelligence boom.

"Local experts attribute Taiwan's rapid economic gains to robust semiconductor exports led by TSMC, the world's largest contract chipmaker, which has benefited from the global artificial intelligence boom."

South Korea's Sectoral Resilience Amidst Downturn [01:33]

Despite the broader economic slowdown, South Korea's department store sector demonstrated resilience.
Department store sales recorded double-digit growth in October and November, driven by luxury purchases from VIP customers and foreign tourists.
The focus is now on whether improvements in key industries like semiconductors and shipbuilding can help South Korea's economy recover from its current downturn.