Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Unexpected jump in birthrate prompts government to tap reserve funds
Baby products are on display during a baby fair at KINTEX in Goyang, Gyeonggi Province, Aug. 7. Yonhap
By Yi Whan-woo
An unexpected increase in the birthrate is prompting the government to use reserve funds — a portion of the budget set aside for natural disasters and other unforeseen expenses — to help cover a shortfall in its regular child care budget.
According to the Ministry of Economy and Finance on Wednesday, its plan to urgently allocate 350 billion won ($253.82 million) from the reserve fund was endorsed during a Cabinet meeting on Tuesday.
The entire 350 billion won will be used to cover the 307.9 billion won shortfall in child care-related expenses, including child benefits and parental allowances.
The government based this year’s child welfare budget on its 2023 population projections, which forecast that newborns in Korea would fall to 220,000 in 2025.
It then decided to tap into reserve funds following a consecutive 12-month increase in the birthrate since July 2024, compared to the previous year.
In March 2024, the number of newborns fell 7.3 percent year-on-year to 19,669, marking the 17th consecutive month of decline and the first time that the monthly figure dropped below 20,000.
Although there were slight increases in April and May, the rate declined again in June, with monthly births remaining under 20,000 throughout the three-month period.
The year-on-year growth rate began to climb steadily thereafter — 7.9 percent in July, 5.9 percent in August, 10.1 percent in September, 13.4 percent in October, 14.6 percent in November and 11.6 percent in December.
This 12-month rise resulted in a total of 238,317 newborns last year, marking the first rebound in nine years.
The upward trend continued into 2025, with increases of 11.6 percent in January, 3.2 percent in February, 6.8 percent in March, 8.7 percent in April, 3.8 percent in May and 9.4 percent in June. This year's total is forecast to reach 250,000.
Under the circumstances, economists say the government may need to allocate more money for child care-related expenses in the coming years.
“More young Koreans are getting married, suggesting a higher chance for the birthrate to rise over time,” said Shin Se-don, professor emeritus of economics at Sookmyung Women’s University.
The professor pointed to the 2024 marriage rate, which increased by 14.8 percent from the previous year — the largest jump since statistics began in 1970.
This growth follows a rebound in 2023, ending an 11-year decline.
According to Statistics Korea, it takes 2.5 years on average for a married couple to have their first child.
A private think tank researcher pointed out that the birthrate in 2024 was highest among women in their early 30s, with 70.4 births per 1,000 women. Many driving the trend were born in the 1990s, when the country’s population was still growing.
“These generations have a growing positive attitude toward marriage and childbirth, raising hope for more births, and accordingly, more government expenses to support families,” the researcher said.