BOK now sees per-capita GNI topping $40,000 this year

Forecast pulled forward nearly a year from earlier 2028 projection

Semiconductor-driven gross operating surplus hits highest since 2010

Stabilizing exchange rate adds further support to outlook

Containers are stacked at Pyeongtaek Port in Gyeonggi Province on Sunday. [Yonhap]
Containers are stacked at Pyeongtaek Port in Gyeonggi Province on Sunday. [Yonhap]

Surging global demand for semiconductors, driven by the worldwide boom in AI investment, is the key force behind the Bank of Korea's upgraded forecast that per-capita gross national income will surpass $40,000 this year — a milestone it had previously expected only by 2028. Exports of semiconductors and other advanced-industry products led the rise in nominal GNI through the second quarter, and the central bank expects that momentum to carry into the second half of the year.

Kim Hwa-yong, head of the BOK's national income division, said Monday at a press briefing on real GDP growth that "if the current rate of nominal GNI growth is maintained and exchange-rate stability continues, the probability that per-capita GNI will exceed $40,000 this year has become very high."

Real GNI in the second quarter rose 3.1 percent from the previous quarter and 15.6 percent from a year earlier. Nominal GNI climbed 8.8 percent quarter-on-quarter and 26.4 percent year-on-year.

The sharp rise in nominal GNI is notable, but analysts say it is unusual for the BOK to use such definitive language — "very high probability" — with six months still remaining in the year.

Strong semiconductor exports underpin the forecast. According to the BOK, net exports — exports minus imports — contributed 0.3 percentage point to second-quarter growth, with semiconductor shipments playing an outsized role. "Despite the war in the Middle East, expanded global AI investment drove up exports of semiconductors and related machinery and equipment, allowing net exports to continue making a positive contribution even from an already-high base," Kim said.

The BOK expects the trend to persist, citing rising US investment in AI. "For now, demand may continue to outpace supply," Kim said. "If US interest rates rise, prices could fall, but volumes themselves are increasing, so the results should still look strong."

That backdrop pushed the second-quarter gross operating surplus — a measure of corporate earnings — up 18.5 percent from the previous quarter and 48.2 percent from a year earlier, the highest growth since the BOK began publishing GDP statistics in 2010. The surge was driven largely by a sharp increase in operating profit across manufacturing, led by semiconductors. Higher gross operating surplus feeds through to household income in the form of performance bonuses and dividends, and also boosts government revenue through corporate and dividend taxes.

A stabilizing exchange rate is adding further support to the outlook. The won strengthened to the 1,330-won range against the dollar on Monday for the first time in one year and 11 months, after elevated levels earlier in the year began easing in August. A stronger won raises the dollar value of per-capita GNI.

Kim had flagged the same conditions at a national income briefing in June, saying that "whether the $40,000 threshold is reached will depend on future corporate earnings and the direction of the won-dollar exchange rate."

As recently as March, the BOK had projected that per-capita GNI would not reach $40,000 until 2028. By June it was hinting the milestone could come sooner, and Monday's announcement pulled the timeline forward by nearly a year.

Deputy Prime Minister and Finance Minister Koo Yun-cheol said at a task force meeting on consumer prices in July that "the probability of achieving annual growth of 3 percent and per-capita GNI of $40,000 this year has become very high."

The BOK also said its full-year growth forecast of 3.4 percent is increasingly within reach. "Arithmetically, if the quarter-on-quarter growth rate averages around 0.2 to 0.3 percent in the second half, the annual target should be achievable," Kim said.


hyuk@heraldcorp.com
kimstar@heraldcorp.com