Two consecutive years of increase! South Korea's number of newborns last year increased by 6.8% year-on-year, the largest growth in fifteen years.

South Korea’s newborn numbers continue to rise for the second consecutive year in 2025, with the total fertility rate returning to the 0.8 range, providing a rare positive signal for this economy long troubled by “ultra-low fertility.” However, the sustainability of this rebound remains uncertain.

On February 25, the South Korean government released data showing that the number of newborns in 2025 was 254,500, an increase of 6.8% year-on-year, with an increase of about 16,100. Preliminary statistics from the country’s statistical department also indicate that this is the largest annual increase in 15 years.

Factors driving the rebound are more related to changes in population structure and marriage patterns. Government analysis suggests that the increase in marriage registrations and the continued rise of women aged 34 and under—who are in their prime fertility years since 2021—are key factors behind the growth in newborns.

However, population pressure has not been fully alleviated. In 2025, deaths still outnumber births by 108,900, indicating the population continues to shrink.

Demographers also warn that this “population dividend” support may weaken starting from 2027. Market expectations for long-term labor force and potential growth still need to be re-priced between short-term rebounds and long-term structural constraints.

Births Rebound, Fertility Rate Returns to 0.8

South Korean government data shows that in 2025, the number of newborns was 254,500, up 6.8% year-on-year. The total fertility rate (TFR) rose to 0.8, an increase of 0.05, marking the first time since 2021 that it has returned to 0.8.

Globally, South Korea remains the only OECD (Organization for Economic Co-operation and Development) country with a TFR below 1.0. Even with the birth increase, the natural population decline pattern has not been reversed.

Additionally, South Korea stated that final confirmed data will be released in August.

Core Drivers of the Rebound: Increased Prime-Age Women and Warming Fertility Intentions

The government attributes the main reasons for the increase in births to the rise in marriage registrations and the growth in the population of women of prime reproductive age. Demographers further attribute this to the “echo boomers” effect, i.e., the approximately 3.6 million people born between 1991 and 1995, who represent a “temporarily amplified generation” entering their peak fertility years.

Correspondingly, under Korean statistical standards, there are about 1.7 million women in their early thirties in 2025, a 9% increase from 2020, an age group typically associated with higher fertility probabilities.

Improvements in marriage are also translating into higher birth rates. As delayed marriages during the pandemic gradually normalize, the number of babies born within two years of marriage increased by 10.2%. Government surveys show that the proportion of respondents planning to have children after marriage rose by 3.1% between 2022 and 2024.

Massive Government Investment, Difficult to Quantify Policy Effects

Regarding the causal relationship between the birth rebound and policies, Park Hyun-jung, head of the Population Trends Division at Korea’s statistical department, stated that it is “difficult to clearly analyze the correlation.” However, she mentioned that young people may be influenced by policies aimed at “eliminating penalties for marriage and childbirth.”

Over the past two decades, South Korea has invested billions of dollars in measures to encourage fertility, including cash subsidies, housing assistance, extended parental leave, and childcare support. Some companies have also introduced stronger incentives, such as offering up to 100 million won (approximately $85,000) for each child born.

These policies and corporate incentives may temporarily impact the marginal costs of marriage and childbirth, but the ongoing fiscal and corporate costs will need to be factored into investors’ assessments.

Structural Constraints Persist: Cost Pressures and Childcare Infrastructure Shrinking

Experts point out that high housing costs, rising private education expenses, stigmatization of parental status in the workplace, and youth unemployment remain structural barriers to further fertility increases, with limited policy countermeasures.

Supply-side contraction is also notable. Pediatric clinics are closing faster than new ones opening, and some local governments lack sufficient delivery facilities, reflecting systemic consequences of years of ultra-low birth rates. Even if demand temporarily rebounds, the capacity of related medical and childcare infrastructure may become a real constraint.

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