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Korea's rapidly aging population feared to sap economic growth

South Korea's rapidly aging population could undermine the country's growth in the coming years, local economists said Thursday, in the latest warning to the Asian country mired with a low birthrate.

Asia's fourth-largest economy grew 2.8 percent in 2016 from a year earlier on increased private and government spending. In 2015, the economy grew 2.8 percent.

Still, the country's economy is forecast to grow 1.9 percent on average between 2016 and 2025 before falling to 0.4 percent on average between 2026 and 2035, Ahn Byung-kwun, an economist at the Bank of Korea (BOK), said in a report

"The effect of the declining population growth, coupled with a drop in the economically active population, could lower the growth rate to around zero percent after 2036," Ahn said in the report, which was co-authored by his fellow economists at the BOK.

In 2015, the number of South Koreans over 65 accounted for 12.8 percent of the population. The ratio is projected to grow to 28.7 percent by 2035 and 42.5 percent by 2065, according to the statistics office.

Nations are classified as an "aged society" if people over 65 make up between 14 percent and 20 percent of the population.

South Korea's rapidly aging population is linked to some extent on the country's birth control policy in the past that has led to a chronic low birthrate in recent years.

The country's total fertility rate -- the average number of children a woman bears in her lifetime -- stood at 1.25 in 2016, much lower than the replacement level of 2.1 that would keep South Korea's population of 51 million stable.

Ahn and his fellow economists said South Korea can keep its growth rate at the upper end of the 2-percent range over the next 10 years and mid 1-percent range in 20 years if Seoul extends the retirement age by five years to 65, raise the number of women active in the labor force, and maintain labor productivity.

In 2015, South Korea's women participation rate in the workforce stood at 57.4 percent, compared to the average of 66.8 percent of member states of the Organization for Economic Cooperation and Development.

Many South Korean women leave work mainly due to marriage, pregnancy and childbirth. (Yonhap)
Korea Herald daum