Published : Dec. 18, 2017 - 09:38
South Korea's ratio of domestic demand to its gross domestic product ranks low among major advanced and emerging markets, which could come as a hurdle to its sustainable growth, a report showed Monday.
South Korea's domestic demand accounted for an average 61.9 percent of its GDP between 1996 and 2015, according to the report from the National Assembly Budget Office.
The figure ranks 27th among the 35 member nations of the Organization for Economic Cooperation and Development, and six major emerging nations, including Brazil, Russia, India and China.
The United States had the highest ratio of 88 percent, trailed by Brazil with 87.4 percent and Japan with 84.8 percent.
According to the report, the proportion for Asia's fourth-largest economy dropped to an average of 56 percent between 2006-2015 from 70.1 percent from 1996-2005.
(Yonhap)
Since the mid-2000s, South Korea's private consumption and investment had been growing at a slower pace than its exports.
The nation's consumer spending and investment expanded in the 4 percent range between 2007 and 2016, while the average growth rate of its overseas shipments came to slightly over 6 percent.
The ratio is feared to fall further down the road amid the country's low birthrate and rapid population aging, which will lead to decreased consumption.
"South Korea finds it difficult to create an economic virtuous circle because of structural problems, such as the low birthrate and population aging," the office said. "It is necessary to make efforts to boost the economy's productivity and thus expand its supply capacity."
South Korea has been gripped by fast population aging. It is tipped to become an aged society in 2017, with the ratio of people aged 65 and older hitting 14 percent of its 50 million population. It is forecast to become a super-aged society in 2026, with the figure above 20 percent. The country also has one of the lowest birthrates among the OECD members. (Yonhap)