Miracle under threat: South Korea’s birth rate collapse could undo decades of growth

South Korea is staring down a demographic freight train. The country, known as one of the “Four Asian Tigers” for its meteoric economic rise from postwar poverty, is confronting a demographic cliff that could stall growth within two decades, studies warn. The Bank of Korea in 2024 projected that the nation’s rock-bottom birth rate will be one of the factors that will push it into a prolonged downturn by the 2040s.

A separate study by the Korea Development Institute in May said demographic shifts will keep dragging on potential growth, which could fall to near zero by the 2040s. In its projections, South Korea’s economy could contract by 2047 in a neutral scenario — or as early as 2041 in a pessimistic one.

South Korea’s birth rate currently stands at 0.748 in 2024, a slight rise from the record low of 0.721 in 2023. That compares with an Organization for Economic Cooperation and Development average of 1.43 in 2023. The commonly cited “replacement rate” for countries to prevent a declining population is 2.1.

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