South Korea's GDP to Shrink 8% by 2026 Due to Population Aging

South Korea's gross domestic product (GDP) may shrink by nearly 8% from that of 2014 in just 12 years should the ratio of its aged population continue to increase at the current pace, a report showed Tuesday. 
According to the report from the Korea Economic Research Institute (KERI), the country's GDP is expected to shrink 7.95% from that of 2014 by 2026, simply due to the lack of people eligible to work, state news agency (Yonhap) reported. 
The country continues to struggle with one of the world's lowest birth rates, while fast improving medical technologies and services are pushing up the overall age of the population. 
As of 2014, the ratio of people aged 65 years or older stood at 12.68%. A country is considered an aged society when the ratio reaches over 14%. 
South Korea's ratio of the elderly population is expected to reach over 20% in 2026, and 35.15% in 2050, the report said. 
"In 2050, the country's aged population is expected to account for 35.15% of the total. This will cause a 21.90% drop in the country's GDP from 2014," it said. 
To keep Asia's fourth-largest economy growing, the country needs to boost its employment rate by 7.8 percentage points to over 73% in 2026. 
However, considering that the country's employment rate gained only 2 percentage points over a 12-year period between 2002 and 2014, it will not be an easy task, it noted. 
"A drop in GDP will be inevitable as the population continues to age at such a fast rate. There need to be efforts to improve the country's employment rate as part of efforts to at least maintain the country's GDP at the current level," the report said.