Korea's per capita income falls sharply on won's depreciation

• Published date: 07 March 2023
• Publication title: The Korea Times

Korea's gross national income (GNI) per capita dropped nearly 8 percent last year, mainly due to a sharp depreciation of the Korean won against U.S. dollar, the Bank of Korea (BOK) said Tuesday.

GNI, which measures a country's wealth, is the amount of money earned by its people and businesses at home and abroad. It is comparable to gross domestic product (GDP), another gauge of national wealth that measures the monetary value of final goods and services produced within a country.

In its preliminary data, the central bank said GNI per capita slid 7.7 percent year-on-year to $32,661 in 2022.

People shop for groceries at a traditional market in Seoul, March 2. Yonhap

The GNI per capita last year is especially a disappointment considering it diminished to the $32,000 level as witnessed in 2020, when the COVID-19 pandemic was at its height and lockdown curtailed economic activities.

The 2022 reading also retreated from the GNI per capita level in 2021, when it surpassed the $35,000 mark for the first time as the Korean economy began to recover and the local currency gained about 3 percent of its value against the greenback.

In 2022, however, the Korean won depreciated 12.9 percent against the dollar due to an aggressive U.S. monetary tightening cycle that prompted a capital flight from Korea in search of safe haven assets.

Plus, the Korean economy reeled from dwindling exports and private spending ? the twin engines of growth ? as global demand weakened and inflation added to the woes of the people's livelihood.

On an annual average, the Korean currency retreated to 1,292 won per dollar in 2022 from 1,144 won per dollar 2021.

The won's depreciation was singlehandedly responsible for a $4,207 decline in GNI per...