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By 2030, 1 / 4 of all South Koreans shall be over 65 years outdated, and the general inhabitants is predicted to peak at round 52 million the identical yr earlier than getting into a interval of regular decline.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 serious 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, often called one of many “4 Asian Tigers” for its meteoric financial rise from postwar poverty, is confronting a demographic cliff that might stall development inside twenty years, research warn.
The Financial institution of Korea in 2024 projected that the nation’s rock-bottom delivery price shall 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 stated demographic shifts will preserve dragging on potential development, which may fall to close zero by the 2040s. In its projections, South Korea’s economic system may contract by 2047 in a impartial situation — or as early as 2041 in a pessimistic one.
South Korea’s delivery 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 “substitute price” for international locations to stop a declining inhabitants is 2.1.
What a 0.72 fertility price means for South Korea is that for each 100 Koreans, they’d have about 36 youngsters at present ranges, shrinking the workforce throughout generations. That might reduce into productiveness and sluggish development, specialists 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 isn’t for lack of attempting. The nation has rolled out bundle after bundle of help measures for newlyweds to have youngsters, together with child bonuses and money rewards. Seoul expended over $270 billion over the previous 16 years on incentives to advertise childbirth, in accordance with a 2024 paper within the Journal of Medical Ethics.
In 2023, Seoul even mooted an concept to exempt males from its obligatory navy service if they’d three or extra youngsters 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 fast postwar rise. “I do not suppose there’s any method that inhabitants coverage can successfully increase 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 observe 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 stated, as it’s nonetheless far under the two.1 substitute price. He famous that the specified household measurement in South Korea continues to be under the two.1 substitute price, which implies that whereas the TFR would possibly climb larger, 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 faculty workers, civil servants, and nationwide pensions — the navy pension and civil servants’ pension have already been depleted, Lee stated.
Present reforms will see a construction the place youthful generations pay larger 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 battle with North Korea, because the Korean Struggle in 1953 ended with a ceasefire, not a peace treaty. North Korea boasts one of many largest standing navy forces on the planet, with round 1.23 million personnel.
No purpose 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 common of the nationwide statistics company, stated economies can discover methods to adapt.
“When an economic system faces recession, it sometimes responds with numerous efforts to reinforce productiveness by technological innovation, immigration insurance policies, and different measures to stop additional decline,” she stated.
AEI’s Eberstadt additionally famous that South Korea can keep and even enhance its prosperity regardless of getting 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 ebook The Inhabitants Bomb, co-authored by former Stanford College professor Paul Ehrlich and researcher Anne Ehrlich, predicted world famine and a rising loss of life 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 stated.
KPPIF’s Lee stated that, contemplating the Korean authorities’s fast coverage adjustments and evolving public consciousness lately, she is assured that breakthrough options will emerge.
Only a few folks would have guess that South Korea may accomplish what it has right now when the Korean Struggle halted in 1953, Eberstadt stated.
“Human beings are a uniquely adaptable,” he added. “It is a very completely different kind of problem, however I do not suppose that the report of the fast previous means that it is sensible cash to guess towards South Korean inhabitants.”
