Korea, South flag

The Economy of Korea, South

Korean Economy

Korea, South's map

Economy - overview: Since the 1960s, South Korea has achieved an incredible record of growth and integration into the high-tech modern world economy. Four decades ago, GDP per capita was comparable with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion dollar club of world economies. In 2008, its GDP per capita was roughly the same as that of the Czech Republic and New Zealand. Initially, this success was achieved by a system of close government/business ties including directed credit, import restrictions, sponsorship of specific industries, and a strong labor effort. The government promoted the import of raw materials and technology at the expense of consumer goods and encouraged savings and investment over consumption. The Asian financial crisis of 1997-98 exposed longstanding weaknesses in South Korea's development model including high debt/equity ratios, massive foreign borrowing, and an undisciplined financial sector. GDP plunged by 6.9% in 1998, then recovered by 9% in 1999-2000. Korea adopted numerous economic reforms following the crisis, including greater openness to foreign investment and imports. Growth fell back to 3.3% in 2001 because of the slowing global economy, falling exports, and the perception that much-needed corporate and financial reforms had stalled. Led by consumer spending and exports, growth in 2002 was an impressive 7% despite anemic global growth. Between 2003 and 2007, growth moderated to about 4-5% annually. A downturn in consumer spending was offset by rapid export growth. In 2008, inflation increased in the face of rising oil and food prices before easing in the fourth quarter. Korea was hit hard by the global financial turmoil that began in September 2008. Stock prices fell by more than 40% for the year and the value of the won fell by approximately 26%. Korean GDP shrank in the fourth quarter and GDP growth for the year was just 2.5%. The Korean government adopted several measures to combat the credit crunch and stimulate the economy.

GDP:

GDP - real growth rate: 2.5% (2008 est.) 5% (2007 est.) 5.1% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 3% industry: 39.5% services: 57.6% (2008 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 2.7% highest 10%: 24.2% (2007)

Distribution of family income - Gini index: 31.3 (2007)

Inflation rate (consumer prices):

Labor force: 24.35 million (2008 est.)

Labor force - by occupation: agriculture: 7.2% industry: 25.1% services: 67.7% (2007)

Unemployment rate: 3.2% (2008 est.)

Budget: revenues: $232.2 billion expenditures: $222.9 billion (2008 est.)

Industries: electronics, telecommunications, automobile production, chemicals, shipbuilding, steel

Industrial production growth rate: 4.5% (2008 est.)

Electricity - production: 440 billion kWh (2008 est.)

Electricity - production by source:

Electricity - consumption: 385.1 billion kWh (2008 est.)

Electricity - exports: 0 kWh (2008 est.)

Electricity - imports: 0 kWh (2008 est.)

Oil - production: 20,970 bbl/day (2007 est.)

Oil - consumption: 2.08 million bbl/day (2008 est.)

Oil - exports: 910,000 bbl/day note: exports consist of oil derivatives (gasoline, light oil, and diesel), not crude oil (2008 est.)

Oil - imports: 2.37 million bbl/day (2008)

Oil - proved reserves: NA bbl

Natural gas - production: 640 million cu m (2007 est.)

Natural gas - consumption: 37 billion cu m (2007 est.)

Natural gas - exports: 0 cu m (2007 est.)

Natural gas - imports: 34.4 billion cu m (2007 est.)

Natural gas - proved reserves: 50 billion cu m (1 January 2008 est.)

Agriculture - products: rice, root crops, barley, vegetables, fruit; cattle, pigs, chickens, milk, eggs; fish

Exports: $419 billion f.o.b. (2008)

Exports - commodities: semiconductors, wireless telecommunications equipment, motor vehicles, computers, steel, ships, petrochemicals

Exports - partners: China 22.1%, US 12.4%, Japan 7.1%, Hong Kong 5% (2007)

Imports: $435 billion f.o.b. (2008 est.)

Imports - commodities: machinery, electronics and electronic equipment, oil, steel, transport equipment, organic chemicals, plastics

Imports - partners: China 17.7%, Japan 15.8%, US 10.5%, Saudi Arabia 5.9% (2007)

Debt - external: $380.5 billion (31 December 2008)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: South Korean won (KRW) per US dollar - 1,101.7 (2008 est.), 929.2 (2007), 954.8 (2006), 1,024.1 (2005), 1,145.3 (2004)

Fiscal year: