In a photo taken on May 26, 2016, a mobility scooter is parked before the rice fields in Gunwi, about 200 kilometers south of Seoul. By 2030, a quarter of all South Koreans will be over 65 years old, and the general population is expected to reach its maximum point in around 52 million the same year before entering a constant decline period. This so -called “silver tsunami” raises a great challenge for the fourth largest economy in Asia as the young population of working age decreases and the cost of caring for the elderly increases. And in remote rural communities such as Gunwi, which are about 200 kilometers southeast of Seoul, the trend is exacerbated by a youth exodus to cities for work.
Ed Jones | AFP | Getty images
South Korea is looking at a demographic loading train. The country, known as one of the “four Asian tigers” for its meteoric increase in postwar poverty, is facing a demographic cliff that could stop growth in two decades, warns the studies.
The Bank of Korea in 2024 projected that the country’s birthday birth rate will be one of the factors that will push it to a prolonged recession for the 2040s.
A separate study conducted by the Korean Development Institute in May said that demographic changes will continue to drag potential growth, which could fall almost zero in the 2040s. In its projections, the South Korean economy could hire by 2047 in a neutral scenario, or as soon as 2041 in a pessimist.
The South Korean birth rate is currently 0.748 in 2024, a slight increase from the minimum record of 0.721 in 2023. That is compared to an organization for economic cooperation and the average development of 1.43 in 2023. The “replacement rate” commonly cited so that countries avoid a population in decline is 2.1.
What means a 0.72 fertility rate for South Korea is that for every 100 Koreans, around 36 children would have at the current levels, reducing the workforce through generations. That would reduce productivity and slow growth, experts say.
Miracle for ‘Milagro on the han river’?
If the technological innovation does not compensate for this decrease, Korea will see a “sustained economic slowdown,” Lee In-Sil, director of the Population Institute of Peninsula of Korea for Future, told CNBC.
And it is not for lack of attempt. The country has implemented a package after support of support measures so that newly married has children, including babies and cash rewards. Seoul spent more than $ 270 billion in the last 16 years on incentives to promote childbirth, according to a 2024 article in the Journal of Medical Ethics.
In 2023, Seoul even discussed an idea to exempt men from their mandatory military service if they had three or more children before the age of 30.
But such efforts have had little impact on an acclaimed country as the “miracle in the river have” for its rapid increase in postwar period. “I don’t think there is any way that population policy can effectively raise fertility levels in South Korea in an appreciable way,” Nicholas Eberstadt, a political economist of the American Enterprise Institute, told CNBC.
People surrounds along a track with the horizon of the city in Singapore on June 27, 2025.
Roslan Rahman | AFP | Getty images
While the total southern Korea fertility rate had increased marginally in 2024, “we should not be built by champagne corks,” Eberstadt said, since it is still well below the 2.1 replacement rate. He pointed out that the desired family size in South Korea is still below replacement rate 2.1, which means that although the TFR could rise higher, it will not reach the figure of 2.1.
Pension impact
A workforce in reduction will also squeeze the pension system. In March, South Korea approved its first pension fund reform in 18 years, extending the exhaustion of the State Pension Fund in 15 years to 2071.
Among the four main pension systems of South Korea (military employees, private schools, public officials and national pensions, military pension and public officials have already been exhausted, said Lee.
Current reforms will see a structure in which younger generations pay higher premiums while receiving lower benefits, which will inevitably cause criticism for transferring the load to future generations, he added.
A smaller draft group also has defense implications. Active South Korea troops have fallen 20% to approximately 450,000, below 690,000 in 2019. The South Korean armed forces are increased by 28,500 US troops, and Seoul has a mutual defense treaty with Washington.
South Korea is still formally at war with North Korea, since the Korean War in 1953 ended with a high fire, not a peace treaty. North Korea has one of the largest military forces in the world, with around 1.23 million personnel.
There is no reason to be pessimistic
Despite the gloomy perspective for the fourth largest economy in Asia, some analysts warn against despair.
Lee, who was also the former general director of the National Statistics Agency, said economies can find ways to adapt.
“When an economy faces the recession, it usually responds with several efforts to improve productivity through technological innovation, immigration policies and other measures to avoid greater decrease,” he said.
Eberstadt of AEI also pointed out that South Korea can maintain and even increase its prosperity despite aging and decrease. He pointed to the 1970s, when the fears of scarcity of resources grew as the world population arose and doubts arose about how to feed it.
In 1968, the book The Popoly Bomb, in co -authorship of the former professor at Stanford University, Paul Ehrlich, and researcher Anne Ehrlich, predicted the global famine and a growing mortality rate as the population grew.
However, 50 years later, the world is “richer, better educated, better fed, better lodged, more prosperous, much less absolute poverty than when the world was smaller,” said Eberstadt.
Lee of Kppif said that, considering the rapid changes of the policy of the Korean government and the evolution of public awareness in recent years, it is confident that innovative solutions will arise.
Very few people would have op.
“Human beings are an adaptable exclusively,” he added. “This is a very different type of challenge, but I do not believe that the record of the immediate past suggests that it is intelligent money to bet against the population of South Korea.”
