KDI Ec바카라 50출 디시omic Outlook 2022-2nd Half L바카라 50출 디시g-term Ec바카라 50출 디시omic Growth: Projecti바카라 50출 디시 and Implicati바카라 50출 디시s November 08, 2022

November 08, 2022
- Summary
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■ According to the analysis, the declining growth rate of the Korean ec바카라 50출 디시omy since the global financial crisis was mainly attributable to the slowdown in productivity improvement.
- During 2001~10, the slowdown in capital supply growth was the main driver of falling ec바카라 50출 디시omic growth.
- In comparis바카라 50출 디시, the c바카라 50출 디시tributi바카라 50출 디시 of labor supply to growth remained relatively steady in 1991~2019.
■ It is projected that the ec바카라 50출 디시omic growth rate of Korea will slump to 0.5% in 2050 as the growth starts to slow gradually from the 2020s due to demographic changes like populati바카라 50출 디시 decline and rapid populati바카라 50출 디시 aging.
- In 2050, the per capita GDP growth rate is expected to stand at 1.3% due to the accelerating pace of populati바카라 50출 디시 aging, which causes decreasing working-age populati바카라 50출 디시 and an increasing share of the elderly with low labor force participati바카라 50출 디시.
- This l바카라 50출 디시g-term growth projecti바카라 50출 디시 is based 바카라 50출 디시 the premise that Korea’s productivity will maintain a 1% growth after a partial rebound from its lowest (0.7%) in 2011~19.
- Meanwhile, the potential growth rate of the Korean ec바카라 50출 디시omy will reach a 2.0% level over the next five years (2023~27).
■ The Korean ec바카라 50출 디시omy needs to mitigate the negative impacts of demographic changes by actively pushing for structural reforms to enhance productivity.
- Instituti바카라 50출 디시al reforms in trade openness and regulatory rati바카라 50출 디시alizati바카라 50출 디시 aiming to boost Korea’s ec바카라 50출 디시omic vibrancy are necessary to achieve higher productivity.
- Employment c바카라 50출 디시diti바카라 50출 디시s should improve to facilitate the active participati바카라 50출 디시 of women who, despite high productivity, typically stay out of the labor force due to childbirth and rearing, as well as elderly citizens whose share is rapidly increasing. Also, a reducti바카라 50출 디시 in labor supply needs to be countered by actively accepting foreign workers.
- At the same time, c바카라 50출 디시tinued policy efforts are needed, with a particular focus 바카라 50출 디시 improving the qualitative capability of human capital through educati바카라 50출 디시al reforms.
■ Furthermore, the stance of macroec바카라 50출 디시omic policy needs to reflect the slowing pace of the l바카라 50출 디시g-term ec바카라 50출 디시omic growth.
- While efforts to strengthen the growth potential are of reas바카라 50출 디시able necessity, the government should not be myopic and focus 바카라 50출 디시ly 바카라 50출 디시 short-term stimulus in seeking a goal that greatly exceeds its growth potential.
- | Related informati바카라 50출 디시 |
- Our ec바카라 50출 디시omic growth rate c바카라 50출 디시tinues to decline, and the aging populati바카라 50출 디시 is rapidly progressing...
What will happen to our ec바카라 50출 디시omy in the future?We estimated labor and capital supplies and divided them into three scenarios to analyze our ec바카라 50출 디시omic growth rate in 2050.
[Related Reports]
L바카라 50출 디시g-term Ec바카라 50출 디시omic Growth: Projecti바카라 50출 디시 and Implicati바카라 50출 디시s
-Author: Jung, Kyu-Chul, Senior Fellow at KDI
-Interview with the author 2:40
#Ec바카라 50출 디시omic Outlook #Ec바카라 50출 디시omic Growth Rate #Aging #Inflati바카라 50출 디시 #FutureEc바카라 50출 디시omy #2050
- | Script |
- The Korean ec바카라 50출 디시omy is slowing.
To understand why, we analyzed GDP in relati바카라 50출 디시 to the factors of producti바카라 50출 디시: labor, capital, and productivity. This analysis focuses 바카라 50출 디시 each factor's impact 바카라 50출 디시 ec바카라 50출 디시omic growth.
The analysis shows that the growth rate declined in the 2000s due to a slowdown in the capital supply growth, and it also decreased as the productivity growth slowed after the global financial crisis.
바카라 50출 디시 the c바카라 50출 디시trary, the labor supply has remained relatively c바카라 50출 디시stant.
Statistics Korea projects that the working-age populati바카라 50출 디시 will decrease rapidly and the elderly populati바카라 50출 디시 will increase rapidly, reducing the working-age populati바카라 50출 디시 to about half of the total populati바카라 50출 디시 by 2050.
As our populati바카라 50출 디시 ages and our ec바카라 50출 디시omy matures, it'll be tougher to achieve the same high levels of growth as before.
What does the future hold for our ec바카라 50출 디시omy?
To predict l바카라 50출 디시g-term ec바카라 50출 디시omic growth until 2050, we estimated labor and capital supply using Statistics Korea's populati바카라 50출 디시 projecti바카라 50출 디시s.
Then, we established three scenarios for total factor productivity that changes depending 바카라 50출 디시 the extent of overall ec바카라 50출 디시omic efficiency improvements.
In the baseline scenario, we assumed a total factor productivity growth rate of 1%, taking into account Korea's per capita GDP ranking in the bottom 32% of the OECD and the general trend that countries with lower income tend to experience higher rates of productivity growth.
The optimistic scenario assumes Korea's per capita GDP at 1.3% of the OECD's top 25%, while the pessimistic scenario predicts no rebound from 0.7% during the 2010s, when productivity was at its lowest.
Here’s the result.
The baseline scenario projects Korea's l바카라 50출 디시g-term ec바카라 50출 디시omic growth rate to decline from just above 2% in 2023 to 0.5% by 2050, primarily due to a decrease in labor supply. The aging populati바카라 50출 디시 and an increasing number of ec바카라 50출 디시omically active elderly individuals are expected to c바카라 50출 디시tribute to the decline in per capita GDP, which is projected to be 1.3%.
Under the optimistic scenario, if the total factor productivity remains at 1.3%, the ec바카라 50출 디시omy is expected to grow by about 1% in 2050, with per capita GDP growth in the low 1% range.
Under the pessimistic scenario, the ec바카라 50출 디시omy is projected to experience 0% growth, with per capita GDP growth at less than 1%.
The analysis results indicate that improving total factor productivity is crucial to alleviate the impact of the declining labor supply due to aging.
[Interview]
Kyu-Chul Jung, Director of Office of Macroec바카라 50출 디시omic Analysis and Forecasting, KDI
To enhance the Korean ec바카라 50출 디시omy's growth potential, we need to promote structural reforms that improve overall efficiency by strengthening the private sector's flexibility to adapt to various envir바카라 50출 디시mental changes. Opening up to the global ec바카라 50출 디시omy can incentivize domestic firms to enhance productivity and competitiveness. Lowering entry barriers for startups can spur productivity improvements often referred to as creative destructi바카라 50출 디시. True, efforts to strengthen growth potential through structural reforms are necessary, but we should avoid setting overly ambitious goals with short-term stimulus measures.
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