Applying the annual average exchange rate, it is $31,790 in Italy versus $31,755 in Korea.
Impact of strong euro and weak won last year… The BOK “Depends on the applied exchange rate…it is difficult to say”
Since the beginning of the year, the Blue House and the government have predicted that last year’s gross national income per capita (GNI) will surpass the G7 (7 major countries) countries for the first time in history, but it is not in a situation where they can actually’overtake’.
According to statistics released by the Bank of Korea on the 4th of ‘2020 4th Quarter and Annual National Income (tentative)’, GNI per capita last year was 31,755 dollars (3,7473,000 won based on the average annual exchange rate last year).
This is a 1.1% decrease from 2019 ($32,115).
In order for Korea to surpass any of the G7 countries with this income level, it must first exceed Italy’s per capita GNI.
According to the results calculated by the World Bank (WB) using the average exchange rate for the previous three years, in 2019, Italy’s per capita GNI ($34,530) slightly outpaced Korea ($3,790). Because.
Shin Seung-cheol, head of the National Accounts Bureau of the Economic Statistics Bureau, said at a press conference last year about the possibility of overtaking Italy, “I know that Italy recently announced the GNI per capita in 2020, but it is difficult to directly compare it with the dollar-based GNI we announced today. He said, “Because the same exchange rate should be applied to the comparison between countries, international organizations such as the World Bank should compare.”
The GNI per capita in 2020, announced by Italy on the 1st, is 27,839.8 euros.
This is a 7% decrease from the previous year, and the rate of decrease is higher than that of Korea (-1.1%).
By simply applying the annual average dollar/euro exchange rate ($1.14190) last year according to the BOK Economic Statistical System (ECOS), it is calculated as $31,790.
It is a little more than the $31,755 of Korea announced that day.
However, an official from the BOK explained, “It is difficult to say that it is now ahead of Italy because we do not know which exchange rate will be applied by any international organization.
When asked on what grounds the government predicted overtaking Italy, he said, “We (the BOK) do not know.”
In the economic world, there is a possibility that the government viewed the exchange rate factor too small.
At the beginning of this year when the government’s overtaking forecast came out, Korea’s last year’s real gross domestic product (GDP) was estimated to be around -1%, while Italy was estimated to be -9 to -8%.
It is an analysis that the gap between the strong euro (appreciation of the euro) and the weakening of the won (depreciation of the won) may not have been sufficiently considered last year, although the possibility of a reversal of per capita national income was publicly mentioned because there was a large difference in the rate of GDP decline.
Based on the average annual exchange rate, last year’s won was depreciated by 1.2% compared to the dollar (1,165.65 won per dollar in 2019 → 1,180.05 won in 2020), while the euro rose 2% (1.11960 dollars per euro → 1.14190 dollars).
/yunhap news