The National Income Of South Korea Falls For The First Time In 4.5 Years

by Czarelli Tuason / Sep 05, 2015 05:40 AM EDT

South Korean won | By: TongRo | Getty Images

For the first time in four and a half years, the national income of South Korea drops, causing the market to worry that the country's economy may be subject to a low growth for the coming years. The last decline reportedly occurred in the fourth quarter of 2010 when the country's national income declined by 1.9 percent.

According to Cihan on an article published on Thursday, the Bank of Korea reported the real gross national income (GNI), the factor that measures South Koreans' income within their country and overseas, dropped 0.1 percent in the second quarter as compared to the quarter before.

While the national income has reduced, the real domestic product (GDP) of South Korea maintained for five consecutive quarters a zero percent increase. The real GDP has also gone up by 0.3 percent in the second quarter compared to the past three months.

Back in 2013, the Foreign Affairs reported in their "Six Markets To Watch" article that South Korea's economy has grown an average of seven percent every year for 50 years with a per capita income of approximately $23,000.

The country is wealthy with advancements in technology and innovation, a mature democracy and a stable leadership. However, South Korea's market is not entirely refined as the total value of its imports and exports amounts to $1.25 trillion per year, surpassing its national income of $1.1 trillion.

Experts attributed the decline of the country's national income growth to the Middle East Respiratory Syndrome (MERS) outbreak and the dry weather. An increase of 4.2 percent in the real GNI was seen in the first quarter, while dividend income from foreign companies' investments made a big drop in the second quarter.

To address the growing concerns of South Koreans both at home and overseas, the Bank of Korea has reduced its policy rate to its lowest 1.5 percent. The county's government has also released a fiscal stimulus package as well as extra budget in order to restore the country's economy.