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The Peninsula

Economic Growth Since the Financial Crisis: Korea and the G-20

Published February 6, 2014
Category: South Korea

By Troy Stangarone

Last week we took a look at how Korea’s economy has performed relative to the BRIC economies – Brazil, Russia, India, and China – since the global financial crisis hit in the fall of 2008. This week we shift our attention to the G-20.

When the crisis hit in the fall of 2008, the decision was made to shift global economic coordination from the G-8 to the G-20, which consisted of a mixture of advanced and developing economies more reflective of the global economy. The G-20 includes not only the advanced economies such as the United States and the United Kingdom who were already members of the G-8, but advanced economies such as Korea and Australia who were not, and developing economies such as the BRICs, Turkey, and Indonesia.

GDP Growth Rates for Korea and the G-20 since 2009

G-20 Chart

Source: World Bank, Trading Economics, Yonhap News, and Russia Today.

Over the last five years, Korea’s economy has outperformed all the advanced economies in the G-20 with the exception of 2012, when the United States and Australia posted higher levels of GDP growth. Interestingly, despite all of the press coverage for Abenomics helping to turn the Japanese economy around, Korea’s economy outgrew Japan in 2013.

As we noted last week, Korea’s economy outperformed the BRIC nations of Russia and Brazil in most years.  Korea also outperformed South Africa, the unofficial member of the BRICs, in all years except 2012, and grew at a comparable level to developing economies such as Mexico.

As to be expected, China’s economy grew at the fastest clip, with Indonesia posting fairly consistent growth in the 5-6 percent range.  In contrast, Korea’s economy has grown on average 3 percent a year since the crisis hit.

Looking at the levels of growth in the G-20, a few interesting observations can be made. First, Korea has had the most robust economic growth of any advanced economy since the crisis hit with Australia, Germany, and Canada being its closest competitors. Australia, of course, has not had a recession in two decades and Canada’s financial system held up to the crisis much better than most other countries.  Second, Korea’s level of economic growth is comparable to some of the developing economies, but is no longer comparable to some of the fastest growing developing economies. Finally, in 2012 we begin to see a downward trend in economic growth across the board that only a few countries such as Mexico and Indonesia seem to escape, helping to explain some of the downward trend in Korea’s own economic growth.

Troy Stangarone is the Senior Director for Congressional Affairs and Trade at the Korea Economic Institute of America. The views expressed here are the authors alone.

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