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South Korea’s potential growth rate was estimated to be two percent for the second consecutive year.
According to the Finance Ministry’s documents submitted for a parliamentary audit on Sunday, the OECD put forth the two-percent estimate for the country this year, the same as last year. The rate gradually declined from two-point-four percent in 2020 and 2021, then two-point-three percent in 2022.
The potential growth rate is an estimate of the value of the output that an economy would have produced if labor and capital had been employed at their maximum sustainable rates consistent with steady growth and stable inflation.
South Korea’s rapidly declining productive age population amid low births and aging society is assumed to have caused the rate to drop, with the number of those aged 15 to 64 forecast to plunge from 71-point-one percent in 2022 to 45-point-eight percent in 2072.
The potential growth rate for the United States, meanwhile, steadily rose from one-point-nine percent in 2020 and 2021, to two-point-one percent last year, due likely to an active inflow of a foreign workforce and development of new industries, such as artificial intelligence.