[News Terms] 'Peak Korea' Raised by Japanese Media

'Peak Korea' is a term that signifies the fact that South Korea's economic growth has effectively come to an end. The Japanese media recently reported that South Korea's economy is hitting its growth peak and declining due to factors such as a shrinking working-age population caused by a demographic cliff.

On the 13th, the Japanese economic newspaper Money1 published an article titled "Korea is Finished," stating, "While Korean media use the term 'Peak China' to describe China's economy as having reached its peak and now on a downward path, Korea should not be worrying about other countries." The article particularly noted, "Even Korea's economic newspapers are publishing bleak forecasts such as 'Korea is finished... a drop to the 0% growth range is only a matter of time,'" referring to this as the 'Peak Korea theory.'

The scene of unloading at Busan Port.
Photo by Yonhap News

The article focused on the gradual decline in South Korea's Gross Domestic Product (GDP) growth rate. From 1980 to 2023, South Korea's annual GDP growth rate once exceeded 13%, but it fell to 2.61% last year and further dropped to 1.40% this year.

Looking at the average growth rates by decade, it decreased from 8.88% in the 1980s to 7.30% in the 1990s, then sharply declined to 4.92% in the 2000s. The GDP growth rate was 3.33% in the 2010s and has fallen to 1.9% in the 2020s. Since the 2020s figure (1.90%) only covers statistics from 2020 to 2023, the rate of decline is expected to accelerate further.

The newspaper cited the Organization for Economic Cooperation and Development (OECD)'s projection that South Korea's potential growth rate will fall to 1.7% next year, attributing this to a decrease in the labor force caused by the demographic cliff.

Based on a report released by Goldman Sachs last year, the article also stated that "South Korea cannot enter the G9." The report observed that South Korea ranked 12th globally by GDP as of 2022 but is expected to fall outside the top 15 by 2050. The newspaper wrote, "Recently, there was an article in Korean media expressing hope that South Korea would join the G9, but just looking at this data, South Korea's entry into the G9 is impossible," adding, "As I have said many times, South Korea's growth era is over."

This Peak Korea theory has also sparked controversy in domestic politics. Yoon Young-duk, the floor spokesperson for the Democratic Party of Korea, introduced the Peak Korea theory reported by Japanese media in a written briefing, criticizing, "Throughout this year, Deputy Prime Minister Choo Kyung-ho, who kept chanting 'low in the first half, high in the second half,' has quietly shifted to an 'economic rebound next year,' spreading an Indian rain dance-style optimism," and added, "This is truly an incompetent and pathetic economic team. President Yoon Seok-yeol should immediately replace the incompetent Choo Kyung-ho economic team and completely overhaul the economic policy."