Challenges to the Korean Economy for Sustainable Growth

Published on June 27, 2024
Published by Macro-Economic Analysis Division, Economic Analysis Department

   The potential growth rate, which represents the fundamental strength of our economy, is gradually decreasing. Korea's potential growth rate, which was estimated to be above 4% until the 2000s, fell to the 3% range in the 2010s and to the low 2% range after 2020. The potential growth rate in 2023 is estimated to be around 2.3%. This decline reflects the increasing impact of structural growth constraints such as a low fertility rate, an aging population, decreased investment vitality, and diminished economic efficiency.
   In response, this report, titled, "Challenges to the Korean Economy for Sustainable Growth" outlines key tasks to help our economy achieve sustainable economic growth. These tasks address domestic economic conditions, the global economic order, responses to the low fertility rate and aging population, investment activation and productivity expansion, and strengthening future competitiveness.
   The report consists of ten chapters. Chapter I, "Korea’s Potential Growth Rate and Sustainable Growth Conditions" examines domestic economic conditions. Chapter II, "Post-Pandemic Global Trade Conditions and Our Exports" and Chapter III, "Energy Security and Carbon Neutrality" explore directions for responding to the rapidly changing global international order. Chapter IV, "Plans to Promote Employment of the Elderly, Such as Extending the Retirement Age" and Chapter V, "Exploring Factors for a Rebound in the Fertility Rate" investigate strategies to address low fertility rates and aging population. Chapter VI, "Structural Characteristics of Investment and Current Challenges" and Chapter VII, "Labor Productivity Trends and Measures to Improve Labor Productivity" examine the environment for improving investment and productivity. Chapter VIII, "Artificial Intelligence, Digital Transformation and Productivity" and Chapter IX, "Building Infrastructure for Revitalizing High-Tech Industries" and Chapter X, "Growth and Impact of Online Shopping" lay out tasks for achieving further growth including enhanced competitiveness in the future.