Trend Korea's potential growth is sliding on a shrinking workforce, weak investment and stalled productivity

Summary

The government diagnoses a sharp fall in the potential growth rate of the Korean economy. It names three causes acting at the same time, namely a shrinking working-age population, subdued investment and stagnant productivity. It also observes that actual activity has been running below even this reduced potential rate. The diagnosis therefore treats slow growth as a weakening of the economy's underlying capacity rather than a passing downturn in the business cycle. This reading supports the government's case that the growth framework built for the catch-up era has to be redesigned.