South Korea’s Modest Growth Outlook Meets Export Gains Amid Per‑Capita GDP Decline

Updated 2026-01-19 09:30:03+00:00 (52 articles)

IMF nudges 2026 growth to 1.9 percent: The IMF’s January World Economic Outlook raised South Korea’s 2026 GDP growth projection to 1.9 percent, a 0.1‑point increase from its October estimate. This figure sits between Seoul’s 2.0 percent target, the Bank of Korea’s 1.8 percent forecast, and the OECD’s 2.1 percent outlook, indicating broad consensus on modest expansion. The revision reflects the IMF’s view that the economy entered a recovery phase in the second half of 2025, supported by fiscal and monetary stimulus and improving consumer sentiment. Downside risks noted include concentration in AI‑related investment, trade uncertainty, geopolitical tensions, and high debt levels in major economies. [1]

Per‑capita GDP slips below Taiwan: Korea’s estimated per‑capita GDP fell to about $36,107 in 2025, a 0.3 percent decline from the previous year. Taiwan’s per‑capita income rose to roughly $38,748, reclaiming the regional lead it last held in 2003. The gap underscores four consecutive years of Korean growth below 3 percent and a weakening won. Analysts attribute the divergence to Korea’s fragmented reform agenda versus Taiwan’s coordinated policy environment. [4]

Food exports hit $10.2 bn record: In 2025, South Korean food and agricultural exports reached a record $10.2 billion, with 45.6 percent shipped to the United States, China and Japan. The United States alone accounted for $1.8 billion (17.5 percent), followed by China at 15.4 percent and Japan at 12.7 percent. The government launched a public‑private task force to diversify markets, targeting emerging economies such as South Africa, Chile, Argentina, Qatar, Turkey, Ghana and India. Efforts also focus on penetrating second‑ and third‑tier cities within the top three destinations. [2]

K‑pop album shipments top $300 m: K‑pop album exports climbed to $301.7 million in 2025, a 3.4 percent rise over 2024, confirming strong overseas demand despite a soft domestic market. Japan remained the largest buyer with $80.6 million, while China’s shipments rose to $69.7 million, overtaking the United States, which received $64 million. Top‑ten markets also included Taiwan, Germany, Hong Kong, the Netherlands, Canada, France and Poland. Domestic album sales fell to about 93.5 million copies, the second consecutive year of decline, highlighting a widening gap between export success and home‑market weakness. [3]

Structural K‑shaped economy limits broad gains: Analysts describe Korea’s economy as “K‑shaped,” where global exporters such as Samsung and SK Hynix profit from the chip cycle while services firms and SMEs lag behind. Productivity gains remain concentrated in a few large firms, leaving many households with stagnant income growth. The government’s 2026 growth target of 2 percent and a record budget of 727.9 trillion won aim to provide short‑term stimulus but cannot raise potential growth without labor‑market reforms and coordinated industrial policy. Without such changes, Korea risks remaining near a $30,000 per‑capita ceiling. [4]