South Korea’s population is projected to halve in 60 years due to low birth rates and a rapidly aging population, the Organization for Economic Cooperation and Development (OECD) warned on July 12. The OECD expects the proportion of those aged 65 and over in the country to reach 58% of the population by then.
Statistics Korea released future population estimates in December last year, predicting that the population will fall to 60% of its current level (51.67 million as of 2022) by 2084, but the OECD’s outlook is even more grim.
The OECD outlined these findings in the recent ‘2024 Economic Outlook’ report. The OECD releases a report that comprehensively examines economic conditions and policy challenges in its member countries every two years.
The OECD attributes Korea’s declining birthrate to several factors, including a challenging social climate that makes it difficult to balance work and family, socioeconomic inequality, and the concentration of births in metropolitan areas. The report emphasizes that there is no single solution to the population problem and calls for comprehensive policies. It suggested expanding parental leave to all workers and expanding public and workplace childcare facilities.
The OECD also identified boosting the productivity of South Korea’s slowing economy as a key challenge. The report noted that “the gap between large enterprises and SMEs is a major factor hampering productivity.” To address this problem, the OECD recommends reducing excessive government support and easing unnecessary regulations. “Korea’s 1,646 tax incentives, subsidies, and other support measures provided to SMEs by central and local governments hinder SMEs from growing,” the report stated.
“The OECD’s policy recommendations align with the major tasks of the government’s ‘Roadmap for a Dynamic Economy,’ and we plan to actively incorporate them into our policy process,” said an official from the Finance Ministry.
