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| Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho, fourth from right, speaks during a policy consultation meeting between the government and the ruling People Power Party (PPP) at the National Assembly in Yeouido, Seoul, Monday. Yonhap |
Asia's 4th-largest economy aims to achieve $40,000 GDP per capita by 2027
By Yi Whan-woo
Korea will aggressively push ahead with incentives and deregulation to revitalize exports and investments in 2023 in a bid to overcome growing economic risks, the government and the ruling People Power Party (PPP) announced jointly on Monday.
In a briefing following a policy consultation meeting on Korea's 2023 economic policy, they also announced their focus on lowering prices as well as enhancing job creation and social safety nets to stabilize people's livelihoods.
The announcement came as the government and the ruling party pledged jointly to increase Korea's per capita gross domestic product (GDP) to $40,000 by the final year of President Yoon Suk-yeol's single, five-year term in 2027.
However, achieving the pledge can be tricky, in the midst of a bleak outlook that Korea's growth rate will slow to the 1 percent range in 2023, after it mostly remained in the 2 percent range for the past several years.
Such an outlook casts clouds on reaching the goal of $40,000 in per capita GDP, from $33,590 projected by the International Monetary Fund (IMF) for this year. The 2022 projection will be a decrease from $34,940 in 2021.
"The Korean economy is expected to face headwinds next year, especially in the first half, as it is likely to continue being affected by the global economic slowdown," Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho said.
He noted Korea's growth slowdown has accelerated faster than expected due to a recent decline in exports that resulted in a trade deficit lasting eight consecutive months until November.
The trade deficit for the first 11 months of 2022 totaled $42.6 billion, which already surpassed the record-high yearly shortfall of $20.62 billion logged in 1996, according to the government.
"Under the circumstances, the focus of the government next year will be on overcoming crisis and taking a leap toward recovery," Choo said.
"We correspondingly will tackle barriers concerning exports and investments aggressively offering incentives and lifting regulations."
He said inflation is believed to have peaked but is expected to be high, while the number of newly added jobs will increase at a much slower pace.
"The government will pay heavy attention to stabilizing prices, too, by taking into account risks associated with financial investment markets, commercial businesses and real estate," Choo said.
Also discussed during the meeting were reforms in the five areas of pension, labor and education systems as well as the finance and service industries.
Rep. Sung Il-jong, chief policymaker of the PPP, said carrying out the reforms will be crucial to cope with population decline, climate change, supply chains and other issues that can reshape industrial structures.
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