By Kim Yon-se
Staff Reporter


South Korea’s per capita gross domestic product (GDP) is expected to rise to $45,000 in 2040 from about $17,000 projected for this year, the Bank of Korea (BOK) said in a report on Monday.

The forecast by the Institute for Monetary and Economic Research (IMER), a research center under the central bank, is based on the projection of steady per capita GDP growing _ an average of 3.5 percent per annum over the next 35 years.

It said the per capita GDP will reach $17,000 this year, up from $14,178 in 2004, on the basis of calculation method of the International Monetary Fund.

Along with the 3.5 percent annual growth in per capita GDP until 2040, the research institute expected Korea’s GDP to grow an average of about 4-5 percent over the period.

Asked about whether the prediction is too optimistic given the falling growth potential amid an aging population, the institute said attaining the country’s growth potential is possible given strong overseas demand and improved domestic economic fundamentals.

``Our forecast is not exaggerated,’’ IMER economist Kim Hyun-jeong said. ``It’s based on neutral data, not on an optimistic or a pessimistic scenario.’’

She said that Korea will enjoy benefits in a variety sectors, including exports, from the two major potential economic superpowers _ India and China.

Kim also said the government’s goal of $20,000 in per capita GDP by 2008 is possible at the current pace.

The institute’s forecast that the nation’s per capita GDP will be equivalent to 65-70 percent of that of Japan and the United States in 35 years, from the current 35-40 percent level.

According to its estimation, per capita GDP of Japan and the U.S. will reach the level of $65,000 in 2040, from the respective $37,556 and $39,553 reported in 2004.

The latest report by the institute came one day after it said in another report that the rapid aging of the Korean population will lower the nation’s annual GDP growth rate to as low as 1-2 percent from 2030.

According to the World Bank’s calculation, the U.S. ranked fifth in the per capita gross national income (GNI), a developed measurement of per capita GDP, in 2003. Japan ranked seventh and South Korea stood at 49th.

In 2004, Japan slid to ninth and Korea inched up to 48th while the U.S. maintained the ranking of fifth.

kys@koreatimes.co.kr