The major economies from Italy to Singapore have already been afflicted by dire demographics. It is estimated that the worst growth crisis in the generations is a reason to prevent or dissuade people from having babies.
Statistics of the Birth Rate
The number of newborns has been dwarfed by the plunging fertility which has emerged in the national data for 2020. The forced isolation has encouraged the couples to spend time together, but the population growth has lowered to a huge scale. Economist James Pomeroy said, “The longer and more severe the recession, the steeper the fall in birth rates, and the more likely it is that a fall in birth rates becomes a permanent change in family planning”. As a result, the potential growth rates will also be lowered. In the record of 2020, Japan saw the fewest newborns while the fertility rate of Taiwan fell below one child per woman for the first time. In Italy, exactly nine months after the pandemic struck, births in 15 cities plummeted 22% in December.
Consequences of Population Decline
Sonal Verma, an economist at Nomura Holdings Inc. said, “The fiscal impact can be a double whammy. Falling population growth will hurt potential growth, hurting tax revenues. And this will occur concurrently with increased spending on public pensions and healthcare”. Fertility across the major economies has steadily declined for decades. Population decline can lead to a decline in basic services and infrastructure.
TPT Policy Advocacy & Recommendations
- The pandemic has curtailed population growth to a huge extent. But a country can grow the total GDP though its population growth is negative.
- The low fertility rates that cause a long-term population decline can even lead to population aging which is an imbalance in the population age structure.