South Korea is poised to pass Japan in per capita gross domestic product six years from now, analysts are predicting.
The prediction is drawing even more attention for coming not from South Korea, but from Japan itself.
Japan’s Nikkei newspaper published an article Thursday quoting data from the Japan Center for Economic Research predicting that in terms of per capita GDP — an indicator of individual prosperity — Japan would be surpassed by South Korea in 2027 and by Taiwan in 2028.
The center cited delayed digital reforms in Japan’s government and stagnant labor productivity as informing its predictions.
As of 2020, Japan’s per capita GDP amounted to $39,890 — 25% higher than South Korea’s and 42% higher than Taiwan’s.
But while South Korea’s per capita GDP was predicted to grow by an annual rate of 6% and Taiwan’s by 8.4%, Japan’s estimated annual growth rate was just 2%. [However, South Korea hasn’t actually seen 6% since 20210.]
The newspaper attributed the gap to differences in labor productivity.
“The rate of increase in labor productivity during the 2020s and 2030s is expected to raise the per capita GDP rate of increase by 4 percentage points in South Korea and Taiwan, but by less than 2% in Japan,” it said.
Meanwhile, China was also predicted to surpass the US by around 2033 in terms of GDP, which signifies a country’s overall economic strength. Late last year, the same center predicted the reversal could happen as early as 2028, but the latest prediction gave a later date.
At the same time, it also projected that the US would regain the lead over China in economic strength around 2050, owing to regulations by Chinese authorities and a long-term trend of population decline.
It’s a prediction that has profound implications for the course of the current intense strategic rivalry between the US and China.