Aging Japan’s Fertility Rate Drops Again to Record Low

(Bloomberg) -- Japan’s fertility rate dropped to a record low of 1.2 last year, in an eighth consecutive decline that underscores the challenges faced by the world’s most elderly country.

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The figure, an indication of the average number of children a woman is likely to produce over her lifetime, dropped below 1 in Tokyo, according to data published by the Ministry of Health, Labour and Welfare on Wednesday.

The total number of births in Japan last year was 727,277, 5.6% less than the previous year, while the total number of deaths rose to almost 1.58 million, meaning the population shrank by 848,659, the 17th straight fall. The data exclude migration.

Rising social security spending has fueled Japan’s soaring debt burden — equivalent to 255% of its economy — while the shortage of young people has left many industries starved of labor. Prime Minister Fumio Kishida has said the country risks losing its ability to function if it doesn’t take radical measures.

About one-third of Japan’s national budget for the current fiscal year is allocated for social security expenditures, at ¥37.7 trillion ($255 billion).

Parliament the same day passed a law to increase child allowances and expand parental leave, Kyodo News reported. The Tokyo government’s policy efforts include offering subsidies on egg freezing, and the capital is set to launch a dating app to encourage people to take a step toward starting families, public broadcaster NHK said.

“I wasn’t shocked at all by the data,” said Harumi Taguchi, principal economist at S&P Global Market Intelligence, who pointed out that marriage rates had fallen during the pandemic. “It’s difficult to determine what the definitive solution will be, so I think we need to hold more dialogues with the parties concerned and explore more effective policies.”

Japan’s shortage of babies comes amid a worldwide decline in fertility. In neighboring South Korea, the fertility rate fell to 0.72, the world’s lowest, last year.

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