In a photograph taken on Might 26, 2016 a mobility scooter sits parked earlier than rice fields in Gunwi, some 200 kilometres south of Seoul.
By 2030, 1 / 4 of all South Koreans might be over 65 years previous, and the general inhabitants is anticipated to peak at round 52 million the identical yr earlier than getting into a interval of regular decline. This so-called “silver tsunami” poses a significant problem for Asia’s fourth-largest economic system because the younger, working-age inhabitants declines and the price of caring for the aged escalates. And in distant, rural communities like Gunwi, which lies some 200 kilometers southeast of Seoul, the pattern is exacerbated by a youth exodus to the cities for work.
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South Korea is staring down a demographic freight prepare. The nation, generally known as one of many “4 Asian Tigers” for its meteoric financial rise from postwar poverty, is confronting a demographic cliff that might stall progress inside 20 years, research warn.
The Financial institution of Korea in 2024 projected that the nation’s rock-bottom start price might be one of many components that can push it into a chronic downturn by the 2040s.
A separate research by the Korea Growth Institute in Might mentioned demographic shifts will maintain dragging on potential progress, which may fall to close zero by the 2040s. In its projections, South Korea’s economic system may contract by 2047 in a impartial state of affairs — or as early as 2041 in a pessimistic one.
South Korea’s start price presently stands at 0.748 in 2024, a slight rise from the report low of 0.721 in 2023. That compares with an Group for Financial Cooperation and Growth common of 1.43 in 2023. The generally cited “alternative price” for international locations to forestall a declining inhabitants is 2.1.
What a 0.72 fertility price means for South Korea is that for each 100 Koreans, they might have about 36 kids at present ranges, shrinking the workforce throughout generations. That may minimize into productiveness and gradual progress, consultants say.
Miracle for ‘miracle on the Han River’?
If technological innovation fails to offset this decline, Korea will see a “sustained financial slowdown,” Lee In-sil, Director of the Korea Peninsula Inhabitants Institute for Future, informed CNBC.
And it is not for lack of attempting. The nation has rolled out bundle after bundle of help measures for newlyweds to have kids, together with child bonuses and money rewards. Seoul expended over $270 billion over the previous 16 years on incentives to advertise childbirth, in line with a 2024 paper within the Journal of Medical Ethics.
In 2023, Seoul even mooted an thought to exempt males from its obligatory navy service if that they had three or extra kids earlier than the age of 30.
However such efforts have made little influence in a rustic hailed because the “Miracle on the Han River” for its speedy postwar rise. “I do not suppose there’s any method that inhabitants coverage can successfully elevate fertility ranges in South Korea in any considerable method,” Nicholas Eberstadt, a political economist on the American Enterprise Institute, informed CNBC.
Individuals cycle alongside a monitor backdropped with the town skyline in Singapore on June 27, 2025.
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Whereas South Korea’s whole fertility price had marginally elevated in 2024, “we shouldn’t be popping the champagne corks,” Eberstadt mentioned, as it’s nonetheless far beneath the two.1 alternative price. He famous that the specified household measurement in South Korea continues to be beneath the two.1 alternative price, which signifies that whereas the TFR may climb increased, it won’t attain the two.1 determine.
Pension influence
A shrinking workforce may even squeeze the pension system. In March, South Korea handed its first pension fund reform in 18 years, extending the depletion of the state pension fund by 15 years to 2071.
Amongst South Korea’s 4 main pension programs — navy, non-public college workers, civil servants, and nationwide pensions — the navy pension and civil servants’ pension have already been depleted, Lee mentioned.
Present reforms will see a construction the place youthful generations pay increased premiums whereas receiving decrease advantages, which can inevitably result in criticism for transferring the burden to future generations, she added.
A smaller draft pool additionally has protection implications. South Korea’s lively troops have fallen 20% to about 450,000, down from 690,000 in 2019. South Korean armed forces are augmented by 28,500 U.S. troops, and Seoul has a mutual protection treaty with Washington.
South Korea continues to be formally at struggle with North Korea, because the Korean Conflict in 1953 ended with a ceasefire, not a peace treaty. North Korea boasts one of many largest standing navy forces on this planet, with round 1.23 million personnel.
No cause to be pessimistic
Regardless of the awful outlook for Asia’s fourth-largest economic system, some analysts warning towards despair.
Lee, who was additionally the previous director normal of the nationwide statistics company, mentioned economies can discover methods to adapt.
“When an economic system faces recession, it sometimes responds with varied efforts to reinforce productiveness by way of technological innovation, immigration insurance policies, and different measures to forestall additional decline,” she mentioned.
AEI’s Eberstadt additionally famous that South Korea can keep and even enhance its prosperity regardless of growing old and shrinking. He pointed to the Nineteen Seventies, when fears of useful resource shortage grew because the world’s inhabitants surged and doubts arose about the best way to feed it.
In 1968, the guide The Inhabitants Bomb, co-authored by former Stanford College professor Paul Ehrlich and researcher Anne Ehrlich, predicted international famine and a rising dying price because the inhabitants grew.
Nevertheless, 50 years later, the world is “richer, higher educated, higher fed, higher housed, extra affluent, a lot much less absolute poverty, than when the world was smaller,” Eberstadt mentioned.
KPPIF’s Lee mentioned that, contemplating the Korean authorities’s speedy coverage adjustments and evolving public consciousness in recent times, she is assured that breakthrough options will emerge.
Only a few individuals would have guess that South Korea may accomplish what it has at present when the Korean Conflict halted in 1953, Eberstadt mentioned.
“Human beings are a uniquely adaptable,” he added. “It is a very totally different form of problem, however I do not suppose that the report of the quick previous means that it is sensible cash to guess towards South Korean inhabitants.”
