Trend Low fertility and ageing are bringing a demographic onus to the Korean economy

Summary

The government expects the demographic onus caused by low birth rates and population ageing to take full effect. As the working-age population shrinks, the contribution of labour input to growth is projected to turn negative around 2030. This shift is expected to pull the potential growth rate down further. The government also warns of a weaker base for domestic demand as the population structure changes. A rising old-age dependency ratio is expected to add to the fiscal burden of supporting a growing elderly population.