South Korea is in uncharted waters. Amid recent economic turmoil in Asia, South Korea has become a safe haven for foreign assets. Some have speculated that emerging market investors have gotten smarter, and therefore can identify countries within the space that are better long term investments. Another school of thought, however, is that South Korea has transcended from an emerging market to a fully developed nation, and therefore presents more security in the face of economic trouble. 

Strong macroeconomic indicators and a healthy financial system has made South Korea a diamond in the rough amidst the recent issues in the Asian markets. The Korean won has been one of the strongest Asian currencies since August, and bond yields continue to fall as South Korea proves to be a stable investment (as bond yields fall, prices rise). Furthermore, after experiencing the “Tiger” economy throughout much of the late 20th century, which saw average growth rates of over 10%, the South Korean economy has stabilized and is now growing at 2.2% annualized pace, which is similar to developed markets like the U.S. and Japan. Another positive indicator in the Korean economy is its 3.7% unemployment rate, putting it in the same company as countries like Norway, Switzerland, and Hong Kong. One potential concern for the South Korean economy is its high household debt, which currently stands at $458 billion. All of these factors, positive and negative, point to the idea that South Korea is in fact a developed nation. Rational, mature growth in GDP is often a characteristic of mature, developed economies. Even the high debt is something that many developed nations experience as a result of ample affordable credit opportunities, so in and of itself it may not be such a bad thing.

Perhaps the most simplistic way to determine whether or not South Korea is in fact a developed nation is to look at key per capita income figures. A 2014 estimate from the CIA world fact book puts South Korean per capita income at $35,300. Korea’s per capita income exceeds the likes of New Zealand, Italy, and Spain, and is very close to figures from the United Kingdom and Japan.

To be sure, it is not one hundred percent certain that South Korea has truly reached the distinction of developed nation. The statistics, however, make a strong case that the Tiger economy has reached full maturity.

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