In a photograph taken on May 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 will probably be over 65 years previous, and the general inhabitants is anticipated to peak at round 52 million the identical yr earlier than coming 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 practice. The nation, often called one of many “Four Asian Tigers” for its meteoric financial rise from postwar poverty, is confronting a demographic cliff that might stall growth inside twenty years, research warn.
The Bank of Korea in 2024 projected that the nation’s rock-bottom birth rate will probably be one of many elements that may push it into a protracted downturn by the 2040s.
A separate study by the Korea Development Institute in May mentioned demographic shifts will preserve dragging on potential growth, which might fall to close zero by the 2040s. In its projections, South Korea’s economic system might contract by 2047 in a impartial situation — or as early as 2041 in a pessimistic one.
South Korea’s birth rate currently stands at 0.748 in 2024, a slight rise from the file low of 0.721 in 2023. That compares with an Organization for Economic Cooperation and Development common of 1.43 in 2023. The generally cited “replacement rate” for international locations to forestall a declining inhabitants is 2.1.
What a 0.72 fertility rate means for South Korea is that for each 100 Koreans, they’d have about 36 kids at present ranges, shrinking the workforce throughout generations. That would minimize into productiveness and sluggish growth, consultants say.
Miracle for ‘miracle on the Han River’?
If technological innovation fails to offset this decline, Korea will see a “sustained economic slowdown,” Lee In-sil, Director of the Korea Peninsula Population Institute for Future, advised CNBC.
And it is not for lack of attempting. The nation has rolled out package deal after package deal 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, based on a 2024 paper in the Journal of Medical Ethics.
In 2023, Seoul even mooted an concept to exempt men from its mandatory military service if they’d three or extra kids earlier than the age of 30.
But such efforts have made little impression in a rustic hailed because the “Miracle on the Han River” for its fast postwar rise. “I don’t think there’s any way that population policy can effectively raise fertility levels in South Korea in any appreciable way,” Nicholas Eberstadt, a political economist on the American Enterprise Institute, advised CNBC.
People cycle alongside a observe backdropped with the town skyline in Singapore on June 27, 2025.
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While South Korea’s complete fertility rate had marginally elevated in 2024, “we should not be popping the champagne corks,” Eberstadt mentioned, as it’s nonetheless far beneath the two.1 alternative rate. He famous that the specified household dimension in South Korea remains to be beneath the two.1 alternative rate, which signifies that whereas the TFR may climb larger, it won’t attain the two.1 determine.
Pension impression
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.
Among South Korea’s 4 main pension methods — army, personal college workers, civil servants, and nationwide pensions — the army pension and civil servants’ pension have already been depleted, Lee mentioned.
Current reforms will see a construction the place youthful generations pay larger premiums whereas receiving decrease advantages, which is able to 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 remains to be formally at battle with North Korea, because the Korean War in 1953 ended with a ceasefire, not a peace treaty. North Korea boasts one of many largest standing army forces on the planet, with round 1.23 million personnel.
No cause to be pessimistic
Despite the grim outlook for Asia’s fourth-largest economic system, some analysts warning in opposition to despair.
Lee, who was additionally the previous director basic of the nationwide statistics company, mentioned economies can discover methods to adapt.
“When an economy faces recession, it typically responds with various efforts to enhance productivity through technological innovation, immigration policies, and other measures to prevent further decline,” she mentioned.
AEI’s Eberstadt additionally famous that South Korea can preserve and even enhance its prosperity regardless of ageing and shrinking. He pointed to the Seventies, when fears of useful resource shortage grew because the world’s inhabitants surged and doubts arose about tips on how to feed it.
In 1968, the e book The Population Bomb, co-authored by former Stanford University professor Paul Ehrlich and researcher Anne Ehrlich, predicted international famine and a rising loss of life rate because the inhabitants grew.
However, 50 years later, the world is “richer, better educated, better fed, better housed, more prosperous, much less absolute poverty, than when the world was smaller,” Eberstadt mentioned.
KPPIF’s Lee mentioned that, contemplating the Korean authorities’s fast coverage modifications and evolving public consciousness lately, she is assured that breakthrough options will emerge.
Very few individuals would have wager that South Korea might accomplish what it has at the moment when the Korean War halted in 1953, Eberstadt mentioned.
“Human beings are a uniquely adaptable,” he added. “This is a very different sort of challenge, but I don’t think that the record of the immediate past suggests that it’s smart money to bet against South Korean population.”