OECD: Korea’s potential growth rate dips below 2% for first time

The OECD projects South Korea's potential growth rate for 2025 at 1.9 percent, marking the first time the projection has fallen below 2 percent ---a point-1 percentage point drop from the 2 percent forecast last December.

A potential economic growth rate of under 2 percent means that even if the factors of production, such as labor and capital, are operating as efficiently as possible, returning to the 2 percent level is not possible without inflation risks.

The Lee Jae Myung administration has pledged to bring the country up to a 3 percent potential growth rate.

Lee's policies focus on addressing structural issues such as low birth rates, an aging society, and weak innovation, in the hope of boosting long-term growth.