A recent analysis by the central bank suggests that South Korea’s potential economic growth rate will fall to one-point-eight percent for the years from 2025 to 2029.

A Bank of Korea(BOK) report released Thursday places the country’s potential growth rate for 2024 to 2026 around two percent.

But the central bank forecasts that the figure will continue its downward movement, resulting in an average annual growth rate of one-point-eight percent from 2025 to 2029 and one-point-three percent from 2030 to 2034.

Further down the road, the BOK predicts that average annual growth will decline to one-point-one percent from 2035 to 2039, zero-point-seven percent from 2040 to 2044, and zero-point-six percent from 2045 to 2049.

The potential gross domestic product(GDP) refers to the maximum level of production that can be achieved without causing inflation, if the economy fully uses all its resources.
 
The potential growth rate is the rate of increase in the potential GDP.

The BOK attributes its predictions to decreased productivity due to a lack of innovation, inefficient resource allocation, and changes in the population structure.