[Alpha Biz= Paul Lee] The International Monetary Fund (IMF) has projected that South Korea's Gross Domestic Product (GDP) will fall from 13th to 15th place globally by 2030. According to the IMF's April World Economic Outlook (WEO), South Korea's GDP, which peaked at 9th place in 2020, is expected to decline to 12th in 2024, 13th in 2025, 14th in 2029, and 15th by 2030. This marks the lowest ranking for South Korea in 40 years, since it was 16th in 1990.



South Korea's GDP in 2030 is forecasted to reach $2.149 trillion (approximately 3,083 trillion Korean won), which would place it 15th globally. Spain, with a projected GDP of $1.799 trillion this year, is expected to surpass South Korea, and by 2029, South Korea will be overtaken by Australia and, by 2030, by Mexico.



While the IMF did not explicitly identify the reasons for South Korea’s GDP ranking decline, it is believed that increasing global trade barriers and high tariffs are contributing factors. The IMF highlighted that trade barriers and tariffs are likely to reduce growth rates in many countries, particularly those with export-driven economies like South Korea.



A key factor in the medium-to-long-term slowdown is the declining working-age population in South Korea. The IMF's report from February recommended that South Korea address its demographic challenges by alleviating burdens related to housing, education, and childcare, raising fertility rates, increasing female labor force participation, and actively attracting foreign talent.



Structural vulnerabilities in South Korea's economy are also evident in the contributions of domestic demand and trade to economic growth. 

 

 

According to the Bank of Korea, domestic demand contributed only 0.1 percentage points to real GDP growth last year, the lowest among the top 20 economies for which data was available. In comparison, exports contributed 2.9 percentage points, and imports contributed 1.0 percentage points, resulting in a net export contribution of 1.9 percentage points.



India is expected to experience the fastest GDP growth. The IMF forecasts that India's nominal GDP will surpass Japan's, reaching $4.187 trillion, making it the 4th largest economy in the world by this year. By 2028, India is projected to surpass Germany and become the 3rd largest global economy. India has a population of over 1.4 billion and a young average age of 27 years.



The gap between the GDPs of the United States and China is expected to remain wide. The IMF has revised China’s growth rate forecast down by 0.3 percentage points for 2025 and 0.5 percentage points for 2026 due to weak consumer demand and rigid policies. As a result, the GDP gap between the U.S. and China is expected to remain over $11 trillion by 2030, with China’s GDP staying at about 66% of the U.S. level.

 

 

 

 

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