Trend Ageing is structurally lowering Korean households' propensity to consume

Summary

The strategy identifies a structural decline in the average propensity to consume as a constraint on consumption growth. It attributes the decline to population ageing and rising life expectancy, which lead households to spend a smaller share of income. Bank of Korea figures cited in the strategy show the overall average propensity to consume falling from 76.5 percent in 2010 to 2012 to 70.0 percent in 2022 to 2024. Between 2025 and 2026 the population in their twenties and younger is projected to fall by 469,000 while those aged seventy and over increase by 362,000. The government therefore sees demographic change as weighing on domestic demand even while cyclical factors improve.