Wednesday’s report showed that South Korea recorded the fastest rate of fertility decline and population aging among 37 countries in the Organization for Economic Cooperation and Development in the past five decades.
The Korea Institute for Economic Research said in its report that the fertility rate contracted by an average 3.1% annually, dropping from 4.53 in 1970 to 0.98 in 2018, which is the fastest rate of fertility decline among the OIC member states.
In the annual trend, the fertility rate of South Korea recorded 1.74 in 1984, lagging behind the United States (1.81), and 1.65 in 1993, which is lower than France (1.66), and decreased to 1.31 in 2001, lagging behind Japan (1.33).
The report indicated that the country is registering the fastest rate of population aging among the member states.
The average annual growth rate of aging in South Korea was 3.3 percent from 1970 to 2018, the highest in the organization.
South Korea is expected to overtake Italy, the third-largest aging population in the organization, in 2036, as the elderly population increases at the fastest pace than Japan, Italy and Spain, which have a high proportion of the elderly population in the organization.
The institute stated that based on the results of the analysis on the effects of fertility and aging on the economic growth rate, whenever the total fertility rate decreased by 0.25, the growth rate decreased by 0.9 percentage points.
He added that whenever the percentage of the elderly population rose by one percentage point, the growth rate decreased by 0.5 percentage point.
The institute called for measures in the medium and long term to prepare for the effects of low fertility rate and aging on growth potential and financial capacity.
He stated that to enhance growth potential, regulations relating to corporate activities should be relaxed and the flexibility of the labor market increased, and it was also necessary to prepare a legal system for government compliance with fiscal soundness obligations in preparation for weak financial capacity.