South Korea’s fertility rate edges up for first time in years
The outlook for fertility remains uncertain as fewer people may be lining up to tie the knot
SOUTH Korea recorded the first increase in its fertility rate in nine years, in a rare piece of positive news for policymakers who have ramped up childcare support in one of the world’s fastest-ageing societies.
The number of babies expected per woman in a lifetime rose to 0.75 last year from 0.72 in 2023, according to data released on Wednesday (Feb 26) by South Korea’s national statistics office. While the fertility rate remained the world’s lowest, it marked the first year-on-year pickup since 2015, when it registered 1.24.
South Korea’s government has spent hundreds of billions of US dollars over the years in a campaign aimed at encouraging more people to get married and procreate. Its steps have included greater financial compensation for parents and a reduction in mortgage interest rates for families that have newborns.
The tick-up in the fertility rate came after marriages increased in 2023 for the first time in more than a decade, led by people born in the early 1990s, a period when the nation saw a bump in the number of births.
The outlook for fertility remains uncertain as fewer people may be lining up to tie the knot. A continuing standoff between the government and medical doctors over a plan to increase the number of medical students is weighing on the minds of potential mothers, while domestic political turmoil and protectionist trade policies overseas are casting a cloud over the economic outlook.
The nation is undergoing a leadership crisis after President Yoon Suk-yeol was impeached in December for his brief martial law declaration, dimming the outlook for effective policy steps, including a plan under the Yoon government to launch a ministry dedicated to boosting fertility. This year the economy is also projected to lose momentum from last year as export growth slows under an array of risks including US President Donald Trump’s tariff plans.
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A dearth of babies is accelerating the ageing of South Korea’s society. That dynamic, in turn, has generated concerns about the growing fiscal burdens of public pensions and healthcare. South Korea’s National Pension Fund, the third biggest of its kind in the world, is expected to use up its funds by the mid-2050s.
Seoul had the lowest fertility rate among major cities, at 0.58. The capital is home to about one-fifth of the nation’s population of 51 million. Busan, a southeastern port city, was second-lowest at 0.68. Sejong, which houses government headquarters, reported the highest fertility rate at 1.03.
Several factors have been blamed for the reluctance among South Koreans to have babies, including high costs of living and a paucity of affordable housing. Parents also fear unfavourable consequences after returning to offices from childcare leave. Parents in South Korea also face expenses for education that proportionately rank among the highest in the developed world.
The shrinking population is also a concern for the central bank. Chipmakers, automakers and other manufacturers may accelerate their relocation of production overseas as the workforce slims, putting pressure on the local currency. Meanwhile, slower economic growth may prompt authorities to ramp up monetary and fiscal support, worsening asset bubbles. BLOOMBERG
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