South Korea's AI surge faces slowdown as aging population curtails consumer spending

South Korea benefits from a surge in AI-related demand, with memory-chip giants Samsung Electronics and SK Hynix seeing large bonuses and the KOSPI climbing close to 60 percent. Yet Goldman Sachs finds that household consumption stays flat, creating a “K-shaped” economy where corporate balance sheets thrive while private demand lags. The country’s fertility rate of 0.8 births per woman and an expanding elderly cohort are reducing the pool of workers supporting retirees.

Seniors tend to save rather than spend, keeping about 37 percent of their income and holding most wealth in real estate, leaving them cash-poor. Consequently, retirees are reluctant to tap housing equity, and reverse mortgages are rare. The firm suggests policies to unlock senior housing wealth and more evenly share tech sector gains could mitigate the slowdown.