South Korea’s central bank has warned that the aging population could drive down the macroeconomic benefits of fiscal expenditure. According to the Bank of Korea's monthly research report, studies show that one percentage point in an increased aging population leads to a 5.9% drop in the fiscal growth of gross domestic product. Korea is becoming an aging society at a fast rate. It is expected it will become a super-aging society by 2025 where more than 20% of the total population is aged 65 years and older. Lee Jae-ho from the Research Department at the Bank of Korea said as the population structure is expected to change drastically it is possible that the growth effect of fiscal expenditure could weaken at a fast speed.
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