By Kim Jae-kyoung
Staff Reporter

The nation’s per capita income is expected to exceed $11,000 this year, meaning the average South Korean is earning more than ever before, the Bank of Korea (BOK) reported on Tuesday.

``It is hard to forecast the per capita income for this year at this moment as we changed the benchmark year and are now reorganizing income statistics,’’ BOK director general Cho Sung-jong said at a news conference.

``But if personal income is calculated in the current basis, it could easily surpass the government-estimated per capital income for this year, as well as the last year’s figure,’’ Cho added.

Earlier this month, the Ministry of Finance and Economy estimated that assuming the gross domestic product (GDP) growth stands at 2.8 percent, per capita income will reach $10,980 this year, up 9.6 percent from last year.

Cho pointed out that the per capita gross national income (GNI) for this year would be actually much higher if it was calculated on a new statistical basis because the new one factors more income sources in than existing system.

Average personal income reached $10,013 last year, up 11.3 percent from $9,000 in 2001. It was the first time in five years that personal income exceeded the $10,000 mark after reaching $10,315 in 1997.

Having dropped to $6,744 in 1998 following the financial crisis in late 1997, average personal income steadily increased to $8,595 in 1999 and $9,770 in 2000, but retreated to $9,000 in 2001.

The rise in personal GNI this year is thanks to the won’s appreciation against dollar, as well as robust exports.

The won-dollar exchange rate stood at 1,186.1 won on Monday, compared with last year’s average rate of 1,250 won. Per capita GNI is calculated in dollars.

The real GNI inched up 0.9 percent to 109.75 trillion won in the third quarter from a year ago, compared with 0.2 percent growth in the second quarter and a 1.8 percent drop in the first quarter.

Real GNI, which is GDP excluding losses and profits stemming from changed terms of trade, represents the real purchasing power of a nation.

The cumulative real GNI for the first nine months of the year dropped 0.2 percent to 321.37 trillion won from a year before, the first setback in five years since it posted a drop of 9.8 percent during the January-September period in 1998.

The central bank said the third-quarter GNI growth rate fell far behind the economic growth rate, with the real GDP growth reaching 2.3 percent.

``The real GNI falling behind real GDP indicates that people are able to purchase fewer goods and services with their income than they expect,’’ Cho said. ``It was due to growing trade losses caused by worsened trade conditions.’’

Trade losses caused by the unfavorable conditions reached 24.4 trillion won during the third quarter, up from 21.83 trillion won a quarter before.

In the meantime, the gross domestic investment rate declined to 23.9 percent in the third quarter from 24.6 percent a year earlier, because of anemic corporate capital spending. It is the lowest since hitting 23.5 percent in the first quarter of 2002.


kjk@koreatimes.co.kr