According to the Bank of Korea on Wednesday, Korea's per-capita GDP in 2010 was around US$20,500, but its per-capital GDP based on the purchasing power parity was estimated at $30,286.This is not a new phenomenon, but it's important to take note of when South Korea's nominal GDP goes up or down based on the fickle exchange rate. Simply put, your $20K per capita GDP in South Korea can go an awful long way... as long as you keep the money in South Korea.
The PPP is the currency conversion rate that eliminates the differences in price levels between countries. The reason why Korea's PPP-based GDP is larger than its actual per-capita GDP is because public utility fees and other consumer prices are cheaper than in advanced countries.
The gap with Japan is narrowing. Japan's PPP-based per-capita GDP in 2010 was $33,828, around $3,500 higher than Korea and ranking 20th in the world, one notch ahead of Korea. Luxembourg ranks first with some $80,000 and the U.S. fourth with $47,000.
But without considering consumer prices, Japan's per-capita GDP is $42,325, according to an IMF estimate, more than twice Korea's.
Wednesday, April 20, 2011
South Korea's per capita GDP near that of Japan?
Well, yes and no. No if you count just regular old GDP, whereby Japan's is twice that of South Korea's (which is slight over twenty grand). But if you're talking about purchasing power parity (PPP), then yes, South Korea's is only about ten percent smaller than Japan's: