Signal If current trends persist Korea's potential growth falls to around one percent in the 2030s

Summary

The strategy projects that if current trends continue, Korea's potential growth will fall to around one percent in the 2030s and to the zero percent range in the 2040s. It presents the projection alongside its diagnosis that falling population, weak investment and stagnant productivity keep pushing the rate down. Average annual investment growth, measured by gross fixed capital formation, slowed from 4.6 percent in the 2000s to 3.2 percent in the 2010s and 1.2 percent in 2020 to 2024. The government acknowledges that slower investment growth is normal as an economy matures, but says Korea's decline is faster than in other major economies. The projection is conditional on the continuation of existing trends and is not an observed value.