The Organization for Economic Cooperation and Development(OECD) has called ageing one of the most worrying trends for South Korea’s fiscal health. 

In its latest report on Tuesday, where it revised upward its outlook for South Korea by four-tenths of a percentage point from June, the agency also pointed out ageing of the population will curtail its labor supply, lower its potential growth rate and put further fiscal pressure on its government. 

The report warned that the number of persons aged 65 or over is projected to exceed 80 percent of the working-age population by 2060, the highest ratio in the OECD. As a result, the nation’s potential growth will drop from an average of three between 2005 and 2020 to an average of one-point-two percent between 2020 and 2060. 

The OECD recommended the South Korean government implement post-COVID-19 stimulus measures that focus more on the most desperate populations so it would not hurt its fiscal sustainability. 

Meanwhile, the organization also warned low labor productivity and lack of work-life balance for many workers could work against the fourth largest Asian economy.