Korea’s growth po­ten­tial at bot­tom among OECD mem­bers

The Korea Times - - FINANCE - By Lee Kyung-min [email protected]­re­atimes.co.kr

Korea’s growth po­ten­tial has dropped sharply to third-last among top 36 ad­vanced economies due to its fall­ing birthrate and rapid pop­u­la­tion ag­ing, data showed Sun­day.

Eco­nomic growth po­ten­tial is the gross do­mes­tic prod­uct (GDP) growth that can be ex­pe­ri­enced with­out caus­ing in­fla­tion. A fail­ure to achieve this means the econ­omy will have dif­fi­culty grow­ing with­out trig­ger­ing in­fla­tion in the fu­ture.

Ac­cord­ing to the Or­ga­ni­za­tion for Eco­nomic Co­op­er­a­tion and Devel­op­ment (OECD), the po­ten­tial growth rate of Asia’s fourth-largest econ­omy dropped to 2.7 per­cent in 2019, a 0.4 per­cent­age points fall from 2017.

This is fol­lowed only by Turkey, whose rate dropped from 5.6 per­cent to 4.9 per­cent in the pe­riod, and Ire­land with a sharper drop of 1.6 per­cent­age points from 5.3 per­cent to 3.7 per­cent.

Eigh­teen other OECD mem­bers, on the other hand, saw in­creases, in­clud­ing the U.S., whose rate stood at 2 per­cent in 2019, up 0.1 per­cent­age point from 2017.

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