SEOUL, July 6 (Xinhua) -- South Korea's economic growth rate may fall to an average of 0.4 percent by 2035 if the rapidly aging population is not tackled, a central bank report said Thursday.
The Bank of Korea (BOK) report, titled population aging's effect on economic growth, said that the annual economic growth rate of South Korea averaged 3.9 percent from 2000 to 2015.
Based on the estimated demographic statistics, the growth rate was forecast to decline to an annual average rate of 1.9 percent during the 2016-2025 period.
If the rapidly aging population is not dealt with, the rate would fall further to an average of 0.4 percent during the 2026-2035 period, according to the report.
In 2017, the percentage of those aged 65 or older was 13.8 percent of the total population. The figure was expected to top 14 percent next year. It would make the country become an aged society.
The aging population would reduce a working-age population in the economy, pulling down labor productivity and worsening private consumption.
The older generation in South Korea was especially vulnerable to economic difficulties due to lack of social security net and shortage of after-retirement life preparations.
Low birth rate added to the concerns. In 2016, an average number of baby, which a South Korean woman aged 15-49 is capable of giving birth to, was 1.18, the lowest among members of the Organization for Economic Cooperation and Development (OECD).
The BOK report said the extension of retirement age can mitigate the negative effect of the rapid population aging on the economy. More participation of women in economic activity can also help the negative effect.
According to the report's estimation, the growth rate will be raised by 0.4 percentage points in the next 10 years if the retirement age is extended by five years.
