South Korea: Country fact sheet

Content Type
Country Data and Maps
Institution
Economist Intelligence Unit
Abstract
No abstract is available.
Topic
Summary, Economy, Background, Fact sheet
Political Geography
South Korea

Fact sheet

Annual data 2020a Historical averages (%) 2016-20
Population (m) 51.3 Population growth 0.2
GDP (US$ bn; market exchange rate) 1,630.8 Real GDP growth 2.0
GDP (US$ bn; purchasing power parity) 2,215b Real domestic demand growth 2.3
GDP per head (US$; market exchange rate) 31,809 Inflation 1.1
GDP per head (US$; purchasing power parity) 43,200b Current-account balance (% of GDP) 4.8
Exchange rate (av) W:US$ 1,180 FDI inflows (% of GDP) 0.8
a Actual. b Economist Intelligence Unit estimates.

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Background: Korea was subjected to colonial rule by Japan from 1910 to 1945, and then to partition by the US and the Soviet Union in 1945. The subsequent war between the two Koreas in 1950-53 cost 4m lives, but neither side won. Summits between South Korea and North Korea were held in 2000 and 2007. Regular contact then led to a cautious thaw in relations, despite the North's nuclear programme. The current president, Moon Jae-in, has spearheaded international efforts to engage with the North, leading to three summits with North Korea's leader, Kim Jong-un, in 2018. However, inter-Korean diplomatic and economic engagement stalled in 2019, as the North preferred direct (but, to date, fruitless) talks with the US.

Political structure: Following several decades of authoritarian rule, South Korea has been a democracy since the 1990s. A directly elected president, who serves a single five-year term, appoints the prime minister and cabinet. A unicameral National Assembly (parliament) is elected every four years. Following the impeachment of Park Geun-hye in March 2017, Moon Jae-in, of the liberal Minjoo Party, won an early presidential election in May of that year. Minjoo subsequently achieved a sweeping victory in the April 2020 general election, marking its dominance in the country's party politics.

Policy issues: Moon Jae-in's government will use the ruling party's strengthened majority in parliament to push ahead with significant fiscal support for job creation, labour-market liberalisation and reform of the prosecution system. Fallout from the corruption scandal that engulfed Park Geun-hye will also highlight the issue of corporate governance-especially for the chaebol (family-run conglomerates)-but these firms will remain dominant in the economy, particularly given their important role in driving the recovery from the economic crisis in 2020. The issue of shifting the export-oriented economy towards innovation and creativity will gain momentum as the government seeks to encourage domestic investment in research and development, in order to reduce reliance on imports of technology and high-tech materials.

Taxation: Corporate income tax ranges from 10% to 25%. Companies are subject to a residency surtax applied at a rate of 10% of corporate tax liability. Personal income tax ranges from 8% to 42%. In addition, a residency surcharge of 10% of income-tax liability is applied. The value-added tax (VAT) rate is 10%.

Foreign trade: Merchandise export revenue stood at US$516.6bn in 2020, while the value of goods imports decreased to US$434.7bn, yielding a trade surplus of US$81.9bn.

Main exports 2020 % of total Main imports 2020 % of total
Machinery & transport equipment 55.0 Machinery & transport equipment 36.3
Chemicals & related products 14.1 Mineral fuels, lubricants & related materials 18.5
Manufactured goods 13.0 Manufactured goods 10.7
Miscellaneous manufactured articles 7.8 Chemicals & related products 9.6
       
Leading markets 2019 % of total Leading suppliers 2019 % of total
China 25.1 China 21.3
US 13.6 US 12.3
Vietnam 8.9 Japan 9.4
Hong Kong 5.9 Saudi Arabia 4.3

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