Aging population and low birth rates drive alarming rise in South Korea’s debt – Bloomberg Intelligence (BI), a research arm of Bloomberg, predicted in a recent report that Korea’s government debt-to-GDP ratio will hit the 70% mark around 2030 and reach 100% by 2045.

From the article

>Last year, Korea’s government debt-to-GDP ratio was lower than that of the G7 countries like Japan (252.4%), the U.S. (122.1%), and Germany (64.3%). But considering Korea’s status as a non-reserve currency country, difficulties may arise in the future. Fitch, an international credit rating agency that previously viewed Korea’s fiscal health positively, noted at the end of last month that the country’s national debt had risen rapidly and surpassed 50% in a short period. As a result, South Korea’s fiscal situation is no longer seen as a positive factor in its sovereign credit rating evaluation.

>Bloomberg Intelligence (BI), a research arm of Bloomberg, predicted in a recent report that Korea’s government debt-to-GDP ratio will hit the 70% mark around 2030 and reach 100% by 2045. The country’s national debt-to-GDP ratio is expected to rise even faster, reaching 120% by 2050.

>BI pointed out that Korea’s shrinking labor force, attributed to a rapidly aging population and low birth rates, will diminish tax revenues. At the same time, social security and healthcare costs are increasing, making government debt a more problematic issue in 20 years.

>The report cites interest rates as the most significant variable affecting Korea’s government debt-to-GDP ratio. If interest rates rise by 1 percentage point above the baseline scenario of 2%, the ratio could soar to 141% by 2050. Conversely, if the interest rate is 1%, the ratio could drop to 101%. If the rate is 0%, it could fall to 83% over the same period.

I believe this is exactly why the US government doesn’t do anything about the illegal immigration or the border.