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Korea, South Economy Profile 2017

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Economy - overviewSouth Korea over the past four decades has demonstrated incredible economic growth and global integration to become a high-tech industrialized economy. In the 1960s, GDP per capita was comparable with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion-dollar club of world economies.

A system of close government and business ties, including directed credit and import restrictions, initially made this success possible. The government promoted the import of raw materials and technology at the expense of consumer goods and encouraged savings and investment over consumption.

The Asian financial crisis of 1997-98 exposed longstanding weaknesses in South Korea's development model, including high debt/equity ratios and massive short-term foreign borrowing. GDP plunged by 7% in 1998, and then recovered by 9% in 1999-2000. South Korea adopted numerous economic reforms following the crisis, including greater openness to foreign investment and imports. Growth moderated to about 4% annually between 2003 and 2007.

South Korea's export-focused economy was hit hard by the 2008 global economic downturn, but quickly rebounded in subsequent years, reaching over 6% growth in 2010. The US-Korea Free Trade Agreement was ratified by both governments in 2011 and went into effect in March 2012. Between 2012 and 2016, the economy experienced slow growth – 2%-3% per year - due to sluggish domestic consumption, a drop in foreign demand for South Korean exports, increased competition from regional rivals such as China and Japan, and declining investment. The administration in 2016 faced the challenge of balancing heavy reliance on exports with domestic restructuring efforts in the country’s shipbuilding and shipping industries.

The South Korean economy's short-term challenges include a potential loss of consumer confidence due to issues with its mobile phone industry, as well as uncertainty stemming from a tumultuous domestic political situation. In the long-term, South Korea must deal with a rapidly aging population, inflexible labor market, dominance of large conglomerates (chaebols), and the heavy reliance on exports, which comprise more than 40% of GDP. South Korea’s low overall unemployment rate masks problems with high youth unemployment, low worker productivity, high labor underutilization, and low female participation in the workforce. The government has tried to implement structural reforms, but continues to face significant headwind from vested interests. Finally, the country could eventually face an unprecedented financial burden in the event the unification of the Korean Peninsula were to occur.
GDP (purchasing power parity)$1.934 trillion (2016 est.)
$1.881 trillion (2015 est.)
$1.83 trillion (2014 est.)
note: data are in 2016 dollars
GDP (official exchange rate)$1.411 trillion (2016 est.)
GDP - real growth rate2.8% (2016 est.)
2.8% (2015 est.)
3.3% (2014 est.)
GDP - per capita (PPP)$37,900 (2016 est.)
$37,100 (2015 est.)
$36,300 (2014 est.)
note: data are in 2016 dollars
Gross national saving35.6% of GDP (2016 est.)
35.8% of GDP (2015 est.)
35.3% of GDP (2014 est.)
GDP - composition, by end usehousehold consumption: 48.8%
government consumption: 15%
investment in fixed capital: 29.3%
investment in inventories: 0.1%
exports of goods and services: 42.2%
imports of goods and services: -35.4% (2016 est.)
GDP - composition by sectoragriculture: 2.2%
industry: 38.6%
services: 59.2% (2016 est.)
Population below poverty line12.5% (2015 est.)
Labor force26.24 million (2016 est.)
Labor force - by occupationagriculture: 4.9%
industry: 24.1%
services: 71% (2016 est.)
Unemployment rate3.7% (2016 est.)
3.6% (2015 est.)
Unemployment, youth ages 15-24total: 10%
male: 11.2%
female: 9.2% (2014 est.)
Household income or consumption by percentage sharelowest 10%: 6.8%
highest 10%: 48.5% (2015 est.)
Distribution of family income - Gini index34.1 (2015 est.)
34.1 (2014 est.)
Budgetrevenues: $297.3 billion
expenditures: $286.3 billion (2016 est.)
Taxes and other revenues21.1% of GDP (2016 est.)
Budget surplus (+) or deficit (-)0.8% of GDP (2016 est.)
Public debt36.1% of GDP (2016 est.)
35.6% of GDP (2015 est.)
Inflation rate (consumer prices)1% (2016 est.)
0.7% (2015 est.)
Central bank discount rate1.25% (31 December 2016 est.)
1.5% (31 December 2015 est.)
Commercial bank prime lending rate3.44% (31 December 2016 est.)
3.46% (31 December 2015 est.)
Stock of narrow money$658.7 billion (31 December 2016 est.)
$604.2 billion (31 December 2015 est.)
Stock of broad money$1.993 trillion (31 December 2016 est.)
$1.917 trillion (31 December 2015 est.)
Stock of domestic credit$2.641 trillion (31 December 2016 est.)
$2.427 trillion (31 December 2015 est.)
Market value of publicly traded shares$1.305 trillion (31 December 2016 est.)
$1.28 trillion (31 December 2015 est.)
$1.269 trillion (31 December 2014 est.)
Agriculture - productsrice, root crops, barley, vegetables, fruit, cattle, pigs, chickens, milk, eggs, fish
Industrieselectronics, telecommunications, automobile production, chemicals, shipbuilding, steel
Industrial production growth rate3% (2016 est.)
Current Account Balance$98.68 billion (2016 est.)
$105.9 billion (2015 est.)
Exports$511.8 billion (2016 est.)
$542.9 billion (2015 est.)
Exports - commoditiessemiconductors, petrochemicals, automobile/auto parts, ships, wireless communication equipment, flat displays, steel, electronics, plastics, computers
Exports - partnersChina 26%, US 13.3%, Hong Kong 5.8%, Vietnam 5.3%, Japan 4.9% (2015)
Imports$391.3 billion (2016 est.)
$420.6 billion (2015 est.)
Imports - commoditiescrude oil/petroleum products, semiconductors, natural gas, coal, steel, computers, wireless communication equipment, automobiles, fine chemicals, textiles
Imports - partnersChina 20.7%, Japan 10.5%, US 10.1%, Germany 4.8%, Saudi Arabia 4.5% (2015)
Reserves of foreign exchange and gold$371.1 billion (2016 est.)
$368 billion (2015 est.)
Debt - external$380.9 billion (2016 est.)
$396.1 billion (2015 est.)
Stock of direct foreign investment - at home$179.2 billion (31 December 2016 est.)
$168.8 billion (31 December 2015 est.)
Stock of direct foreign investment - abroad$348.8 billion (31 December 2016 est.)
$298.6 billion (31 December 2015 est.)
Exchange ratesSouth Korean won (KRW) per US dollar -
1,167.6 (2016 est.)
1,130.95 (2015 est.)
1,130.95 (2014 est.)
1,052.96 (2013 est.)
1,126.47 (2012 est.)
Fiscal yearcalendar year

Source: CIA World Factbook
This page was last updated on July 9, 2017

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