Decline in economically active population to affect growth potential

Published : Mar 8, 2017 - 17:00 Updated : Mar 8, 2017 - 17:24

South Korea's economically active population is set to decline in the coming years, a local think tank said Wednesday, a chronic trend that could undermine the growth potential of Asia's fourth-biggest economy.

The number of the country's economically active population aged between 15 and 64 is expected to reach 37.62 million in 2017, down from 37.63 million a year earlier, according to government data.

The number of the country's economically active population is showing a decreasing trend. (Yonhap)

Separate data compiled by the Organization for Economic Cooperation and Development, a group of 34 mostly rich nations, showed that South Korea's economically active population could fall by 6.8 percent in 10 years and 17.8 percent in 20 years.

"The Korean economy will suffer a slow growth for the time being due to low demand," LG Economic Research Institute said in a report.

The institute warned that the country's potential growth rate could fall to an average of 1.9 percent annually during the

2020-2024 period, down from 3.6 percent in the early 2010s due to shortfalls in the labor force.

It also said young graduates in their 20s will have difficulties in landing a job by 2019 amid a prolonged economic slowdown. But in the 2020s, companies will have trouble recruiting people in their 20s due to low birthrates and an aging population.

The unemployment rate for young people, aged between 15 and 29, reached 8.6 percent in January, much higher than the overall jobless rate of 3.8 percent, according to government data. (Yonhap)