[Anchor]
South Korea's economy grew at its fastest pace in 47 years during the second quarter. The per capita gross national income is also projected to surpass 40,000 dollars for the first time on record, but the problem is that this feels far removed from actual improvements in our daily lives.
Reporter Kim Beom-joo takes a closer look at why.
[Reporter]
South Korea's economic report card for the second quarter looks impressive.
Nominal GDP surged by a massive 26.4 percent compared to the previous year, marking the highest growth rate in 47 years since 1979 under former President Park Chung-hee.
Gross National Income (GNI), which measures what businesses and individuals earned worldwide, also increased by 15.6 percent—the highest record in 38 years, also since 1988, the year of the Olympics.
This growth was driven by strong exports, centered around semiconductors.
The Bank of Korea analyzed that if current trends continue, per capita national income will reach 40,000 dollars this year for the first time ever.
That is good news.
However, at 40,000 dollars, which amounts to about 53 million Korean won, many people will likely wonder why the average is so high when they do not earn nearly that much.
The term "national income" can cause misunderstandings because it is actually calculated by combining the money earned by individual citizens, the money earned by corporations, and the tax revenue collected by the government.
So, how much of that actually enters the pockets of individual citizens? Just a little over half, at 55.5 percent.
Back in 1975, when these statistics were first compiled, for every 100 won the nation earned, citizens took home 77.5 won—nearly three-quarters. This means that as time has gone on, the share taken by corporations and the government has increased, while the portion going directly to citizens has decreased.
The Bank of Korea stated that if large corporations distribute money through dividends and performance bonuses, consumption will increase.
[Kim Hwa-yong / Head of National Accounts Department, Bank of Korea: Government income, such as corporate tax, earned income tax, and dividend income tax, is also increasing, which is expected to lead to a boost in domestic demand with some time lag.]
However, it is time to give more thought to how to evenly spread warmth across the entire domestic economy.
Also, given that total income has indeed increased, it is highly likely to stimulate inflation and, further down the line, housing prices—leaving yet another homework assignment for policy authorities.
(Video Editing: Ahn Yeo-jin, Design: Lee So-jung)
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