Korea's GDP per capita to top $40,000 this year, IMF says

Fund brings milestone forward by two years, raises growth forecast to 3.3%, sharply lowers government debt projections

South Korea's gross domestic product per capita is projected to exceed $40,000 for the first time this year, according to the International Monetary Fund, which also sharply lowered its forecasts for the country's government debt burden.

The IMF's October World Economic Outlook database puts Korea's GDP per capita at $43,512 this year, up 19.5 percent from an estimated $36,408 in 2025. The forecast brings the milestone forward by two years from the fund's April projections, which placed this year's figure at $37,412.

The fund expects the figure to rise to about $49,277 next year and exceed $50,000 in 2028, reaching $52,100. By 2031, it is projected to approach $60,000.

Korea would remain slightly behind Taiwan this year, with the latter's GDP per capita forecast at $43,951. Taiwan overtook Korea last year for the first time in 22 years. While Korea is expected to move ahead next year, IMF projections show Taiwan regaining the lead in 2030. In comparison with Japan, the IMF projects Korea will remain ahead throughout the forecast period.

Total nominal GDP is forecast to reach about $2.25 trillion this year, exceeding $2 trillion for the first time, and roughly $3.07 trillion by 2031. The dollar-denominated per capita figure reflects prices and exchange rates as well as economic growth, and does not measure individual earnings.

The projections accompany an upgrade to Korea's real growth outlook. In its economic outlook released Tuesday, the IMF raised this year's forecast to 3.3 percent from 2.6 percent in July. The 0.7-percentage-point increase exceeded the upgrades of 0.1 percentage point for the world economy and 0.4 percentage point for advanced economies.

Korea's growth will be "buoyed by strong external demand for semiconductors, which supersedes the negative impact of the war," the IMF said. The report also identified Korea and Taiwan as key suppliers of hardware supporting the global AI boom.

The revised forecast matches the Bank of Korea's 3.3 percent projection and exceeds the local government's 3 percent and the Asian Development Bank's 3.2 percent. It remains below the Organization for Economic Cooperation and Development's 3.7 percent.

The IMF also raised next year's growth forecast to 2.8 percent from 2.5 percent. It publishes comprehensive forecasts in April and October, with updates covering major economies in January and July.

The improving outlook was also reflected in the fund's October Fiscal Monitor, released Wednesday, which projected Korea's general government gross debt at 46.1 percent of GDP this year, down from the 54.4 percent forecast in April.

The revision extends across the medium term. The fund now expects the ratio to reach 51.3 percent in 2031, compared with its earlier projection of 63.1 percent.

Korea's projected debt ratio remains below this year's averages of 107.6 percent for advanced economies and 123.6 percent for the Group of Seven. By 2031, however, Korea's ratio is expected to rise by 5.2 percentage points.

According to the Ministry of Planning and Budget, the IMF attributed the lower debt projections to stronger GDP growth and the prospect of improving revenue conditions through 2030.

The ministry said the revisions reflected a "virtuous cycle between fiscal policy and growth," with public spending supporting growth and expanding the tax base.