SEOUL, KOREA – LG Economic Research Institute said on December 4 in a report "Population Aging: The National Finance Breaker," "Korea has all the hallmarks of what caused the Japanese fiscal crisis." "Given the rapid aging pace of the Korean population, it is imperative to find out what really caused the Japanese government debt problem and what to do about it," the report argued.
The cumulative debt assumed by the Japanese government is in excess of 200 percent of the GDP (as of 2011), even higher than that for Greece.
The report predicted that Korea will exhibit similar patterns. As for the speed of population aging, Korea is expected to take only 18 years to transition to an aging society (defined as one with more than 7-percent 65-and-older population in total) while it took for Japan 24 years.
The continuously falling working population is a flip side of the coin of the aging society's ills. As the number of working population declines, the report said, tax receipts will fall. which would bring down the potential economic growth rate with it. Korea will begin experiencing a decrease in working population numbers from 2016.
*Article provided by The Korea Economic Daily
저작권자 © Korea IT Times 무단전재 및 재배포 금지