8 hours Ago By [email protected](KoreaTimes)
The Bank of Korea (BOK) Gov. Rhee Chang-yong speaks during the Global Engagement & Empowerment Forum (GEEF) held in Seoul, March 14. Yonhap The chief of the Korean central bank warned Friday the current level of ultra-low birthrate will cause Korea to log negative economic growth after 2050, calling for measures to ease intense competition and burdens regarding employment, housing and child care.
The Bank of Korea (BOK) Gov. Rhee Chang-yong issued the warning in his keynote speech during the Global Engagement & Empowerment Forum (GEEF) held in Seoul, citing the demographic crisis and climate change as the most urgent challenges facing the country. "The current fertility rate constitutes a national emergency.
If this trend continues, Korea faces an irreversible population crisis that threatens economic stability and social cohesion," Rhee said. "If the fertility rate remains at 0.75, Korea will inevitably face prolonged negative economic growth after 2050," he added, citing a recent BOK study that showed the country's potential growth rate may approach near zero percent by the late 2040s from the current 2 percent level.
The total fertility rate, which represents the average number of expected births per woman in her lifetime, came to 0.75 in 2024, far below the 2.1 births per woman needed to maintain a stable population without immigration, government data showed.
"Young people today face fierce competition for scarce, high-quality jobs, making career stability difficult. Simultaneously, soaring housing prices make home ownership seem unattainable. Under these pressures, raising children is more than challenging: it is an overwhelming financial and emotional burden," Rhee said.
The demographic crisis was blamed for "the extreme concentration" of population and economic activities in the Seoul metropolitan area and highly competitive university entrance system, the governor said, calling for efforts to foster regional hub cities and the so-called regional proportional college admission system. "We must strategically develop two to six carefully selected regional hub cities. Targeted, large-scale investment in key infrastructure is essential to providing life quality comparable to Seoul, thus effectively attracting and retaining residents," Rhee said.
"Under the regional proportional admission system, universities voluntarily allocate admissions based on each region's proportion of high school seniors," he added. Speaking of climate challenges, the governor stressed the need to make carbon pricing more realistic and improve the country's emission trading system to create more market incentives for emission trading. "Severe localized climate damage could cause significant financial losses for households and businesses, destabilizing financial institutions and spreading shocks throughout the economy.
The BOK actively studies the impact of climate risks on our industries and financial system. We will present the result of our climate stress tests under various scenarios soon," Rhee said. (Yonhap).
