Per capita income in South Korea declined for the second year running in 2020, as the COVID-19 pandemic dragged the economy down to its lowest point since the 1997-1998 Asian financial crisis, data showed Wednesday.

Per capita annual income, as measured in US dollars, shrank last year to $31,881, down from $32,204 in 2019 and $33,564 in 2018, according to data compiled by the Bank of Korea.

The data came as Asia’s fourth-largest economy has started to recover from the blows dealt by the pandemic, despite lingering uncertainties. Korea’s economy shrank 0.9 percent last year -- a 0.1 percentage point improvement on the BOK’s earlier estimate -- marking the sharpest decline in 22 years when it shrank 5.1 percent.

The nation’s job market, especially the services sector, was crushed by the government’s strict social distancing rules last year that kept people at home and some businesses closed. As of end-2020, 218,000 fewer people were employed here, compared with 2019, marking the sharpest decline in more than two decades.

Per capita income in Korean won gained 0.2 percent on-year, however. The discrepancies are due to the won-dollar exchange rate. The won gained an annual average of 1.2 percent against the dollar last year.

Meanwhile, Korea’s economy has snapped back quicker than expected, expanding 1.7 percent in the first three months of the year on-quarter, according to preliminary data from the central bank.

The figure, driven by a rebound in exports -- which accounts for more than half of the nation’s economy -- was 0.1 percentage higher compared with an earlier forecast.

Exports gained 2 percent on-quarter in the cited period, with higher overseas demand for automobiles and mobile phones.

The nation’s Industry Minister Moon Sung-wook told reporters Tuesday that Korea was close to setting a new record for annual exports this year due to its successful response in containing the pandemic.

South Korea’s outbound shipments jumped 45.6 percent on-year in May to extend their gains to a seventh consecutive month.

Last year, the nation’s annual exports fell 5.4 percent on-year to $512.8 billion.

With Korea’s economy apparently on track toward a faster-than-expected recovery, the BOK faces a new dilemma on choosing the right time frame for an expected rate hike. The BOK last month revised up its economic outlook for 2021 by 1 percentage point to 4 percent, while keeping its benchmark interest rate at a record-low of 0.5 percent.

Compared with his earlier remarks, BOK Gov. Lee Ju-yeol adopted a more hawkish tone on the nation’s monetary policy, hinting that a rate hike here could even come earlier than in the US.

A sharp rise in consumer prices has triggered heavy inflation worries here. The nation’s consumer price index gained 2.6 percent on-year in May, the sharpest growth in more than nine years.

The nation’s vaccination rate -- viewed as a key factor in determining the schedule for a monetary policy shift -- stood at roughly 18 percent for a first dose, as of early Wednesday, but onlookers say it is likely to pick up speed.

By Jung Min-kyung (mkjung@heraldcorp.com)