SEOUL (Reuters) – South Korea’s potential economic growth rate is estimated to have fallen to around 2% and is projected to fall further below 1% by the late 2040s due to a lack of innovation and inefficient resource allocation, the central bank said on Thursday.
The Bank of Korea (BOK) estimated in an analysis that the potential growth rate, the maximum growth an economy can achieve in a year without triggering inflationary pressure, was around 2% from 2024 to 2026.
The rate has been falling in trend, from the lower 5% range in the early 2000s to the mid-to-lower 3% range in the 2010s and to mid-2% levels by 2020, the BOK said, citing lack of innovation and inefficiency in resource allocation.
In the long-