The International Monetary Fund (IMF) has projected that South Korea's potential growth rate will hover at low two percent levels in the 2020s and drop to the one percent range in the 2030s.
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The IMF on Sunday released a report on its assessment of annual talks with South Korean policymakers.
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According to the report, South Korea's real growth domestic product (GDP), which expanded to three-point-two percent last year, is predicted to slowly decrease to three percent this year, two-point-nine percent next year, two-point-eight percent in 2020 and two-point-six percent in 2022.
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The IMF report said that the country's growth potential will shrink to two-point-two percent in the 2020s and fall to around the one percent level in the 2030s due to a decrease in the labor population.
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It presented the projections citing the rapidly ageing society, low productivity in the service sector and distortions in the country's labor market.
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The report said that South Korea needs to expand its social security net, improve its productivity and reform the labor sector.