The state-run Korea Development Institute(KDI) has given a grim outlook of the domestic economy, projecting annual growth to plunge to zero-point-five percent by 2050.

According to its latest report issued on Tuesday, South Korea's economy is forecast to expand by about two percent between 2023 and 2027, before gradually slowing on the back of population decline and a rapidly aging society.

Along with placing the growth potential at zero-point-five percent in 2050, the KDI also expected one-point-three-percent growth in gross domestic product per capita based on the premise that productivity growth will rebound to one percent and hold steady.

Should productivity growth stay at the zero-point-seven percent as posted between 2011 and 2019, the KDI calculated that growth in 2050 will fall to zero percent.

Citing the rapidly aging society as a major factor in the slowdown of potential growth, the institute called for structural reforms, such as creating conditions that facilitate more economic participation by women and seniors, to improve productivity.