City skyline in downtown Seoul. (Photo: CFP)

South Korea's huge national pension fund is set to see its pool of money depleted by 2055, earlier than expected, because of a shrinking population amid low economic growth, an official estimate showed on Friday.

A government panel commissioned for the estimate, made every five years, said in a report that the National Pension Service (NPS) would see its fund depleted two years earlier than predicted in 2018.

The NPS had 915 trillion Korean won ($743.13 billion) of funds as of the end of October 2022, the third-largest in the world and equivalent to 42 percent of that year's estimated annual gross domestic product, official data shows.

The fund will grow until at least 2040 as the relatively young pension system, launched in 1988, still has more contributions than payments. After that, it will shrink, the panel said.

President Yoon Suk-yeol, who took office in May 2022, has promised sweeping reforms of the national pension system with the aim of making it more sustainable, and the panel's findings will be the basis for the reform plans.

South Korea's population has started shrinking since reaching its peak in 2020 at 51.84 million, and the speed of decline will likely quicken because of low birth rates, official data and estimates show.