Korea: AI and demographics brighten the long-term outlook

Korea’s trend growth has slowed over the past few decades, reflecting weaker productivity and slower workforce growth. But we think this slowdown has come to an end, with rising female labour force participation and the adoption of AI (globally and across the Korean economy) helping to sustain growth at around 2.0–2.5% through to 2040, broadly in line with the average of the past decade. We have revised up our long-term GDP forecasts for Korea.