The face of Germany could change rapidly as its birth rate has plunged to the lowest level in the world.
As longevity increases, the country’s workforce will begin to shrink by 6 million over the coming 15 years, menacing the viability of Europe’s most productive economy.
The average number of births per 1,000 women fell to just 8.2 from 2008 to 2013, according to a report from the World Economy Institute in Hamburg.
Portugal’s birthrate of 9 per 1,000 and Italy’s 9.2 puts them in the same peril.
“No other industrial country is deteriorating at this speed despite the strong influx of young migrant workers. Germany cannot continue to be a dynamic business hub in the long-run without a strong jobs market,” warned the institute.
The demographic crisis has been some time in the making and has been worsened by the post-war baby boom being followed by a sudden drop in the number of births.
Official estimates predict that the population will decline from 81 million today to 67 million by 2060.
Japan has also been struggling with a declining population, although the birthrate of 8.4 was slightly higher than Germany’s. But the decline there has been more gradual while that in Germany will be abrupt.
The changes will have massive social consequences as life expectancy is due to hit 88 for women and 84 for men, but the number of working age people will fall from 62% to 54% by 2030. This will bring the dependency ratio close to 1:1 which will challenge the viability of the pension system.
The threat could also extend to businesses which will find new product development difficult as countries with older populations are often ones without innovation.
The Institute said that further immigration of skilled workers would alleviate the situation while recognising that 10 million foreign-born nationals, 12% of total population, are already there and an additional 400,000 migrants are expected this year.
With Britain and France averaging 12.5 births per 1,000, a radical shift in the balance of power in Europe could take place by as early as 2040.
