South Korea could face a potential social conflict amid stagnant economic growth of under 1 percent and mounting debt that put an economic burden on the younger generation, local economists warned Wednesday.

According to The Korean Economic Association, Lee Jong-hwa, the association’s president, projected in a report that Korea’s gross domestic product (GDP) will grow by an average of 0.9 percent between 2050 and 2060 due to a sharp decline in its population. The report will be shared during a symposium organized by the association this week.

Economists warn that the Korean economy could be subdued for a long term and low growth of below 1 percent could become a new norm in the absence of capital investment that helps drive productivity. The low growth trend could put a burden on the young people, they say.

Ha Joon-kyung, an economics professor at Hanyang University, analyzed that young people in Korea took on the debt of the elderly people after 2010. He noted that the largest debt was held by households headed by those aged between 55 and 59 before 2013 but after 2014 it was held by households led by those aged between 35 and 39.

Experts note that the middle-aged group in Korea that owns their own housing property passed on the debt to younger non-homeowners.

“More risk on a particular age group could cause social discontent and conflict between generations,” Ha said.

Experts also point to how there is a widening gap between the incomes of young people. Economists analyze that the wage of young people born after 1980 increases 9.8 percent on average in between the five income groups of their parents, which is higher than the increases of 1 percent for those born in the 1960s and 0.3 percent for those born in the 1970s.

By Lim Sung-hyun and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]