Trend Korea's economic fundamentals erode as potential growth falls about one point per administration

Summary

The strategy describes potential growth as the basic fitness of the economy and says it has recently fallen to the upper one percent range. It observes that the rate has generally declined by about one percentage point under each successive administration. Falling population, weak investment and stagnant productivity are all said to contribute to the sharp decline. Rigid regulation and the concentration of funds in real estate have depressed investment, while protectionism and value chain crises raise concerns about investment leaving the country. Productivity has stalled because of the persistent technology gap with leading economies, Chinese catch-up, delays in the AI and green transitions and low productivity in small firms and services.