A Japanese think tank has forecast that South Korea will outpace Japan in terms of nominal gross domestic product(GDP) per capita in 2027. 

Japan’s Nihon Keizai Shimbun reported on Thursday that South Korea’s per capita nominal GDP is expected to post an annual growth of six percent through 2025 while the projection for Japan stands at just two percent growth, citing an outlook issued by the Japan Center for Economic Research.

According to the International Monetary Fund, as of 2020, Japan’s nominal GDP per capita is over 25 percent higher than that of South Korea’s. 

However, the Japan Center for Economic Research said Japan is likely to be outpaced by South Korea by 2027 and by Taiwan in 2028 due to a relatively sluggish increase in labor productivity resulting from a delay in a digital transition of of administrative services. 

The research center projected that progress in such a transition will be a key factor in deciding the success of Japan’s labor productivity. 

It cited that South Korea and Taiwan have already incorporated digital documentation and processing at most government agencies but Japan continues to use insist on using non-digital procedures such as requiring personal seals or signatures, rather than transitioning to a digital format. The center said if Japan fails to make progress in this area, its economy could constantly suffer minus growth in the 2030s.