Analysts project that drastic slump will hurt growth in Europe's economic powerhouse
The Sunday Times, 31 May 2015
The Sunday Times, 31 May 2015
Berlin - Move over Japan. Germany now has the world's lowest birth rate, and its economy is poised to suffer as a result.
Germany recorded about 8.3 births per 1,000 citizens in the five years until 2013, less than Japan's 8.4, according to a study released on Friday by consultants BDO AG and the Hamburg Institute for International Economics.
In Europe, Portugal and Italy came in second and third, with an average of 9 and 9.3 children, respectively. They were followed by France and Britain, both averaging at 12.7 births per 1,000 inhabitants, BBC reported, citing the study.
While other Western nations are also experiencing declining birth rates, nowhere has the change been as drastic as in the country that carries the crown of Europe's economic powerhouse. The tally has shrunk by half in the past 50 years, according to the findings.
"This results in significantly negative consequences for Germany's economic attractiveness and performance in the global competitive landscape," Mr Henning Voepel, head of the Hamburg institute, said in a statement. The kinds of impact may include rising non-wage labour costs and an increased urgency to attract skilled workers from abroad, BDO said.
Chancellor Angela Merkel has singled out Germany's ageing population as one of the biggest challenges the country faces in the decades to come.
The number of people of working age for every pensioner may shrink to two by 2033 from four in January 2013, projections by Eurostat, which provides statistical information for European Union institutions, show.
"Without strong labour markets, Germany cannot maintain its economic edge in the long run," Mr Arno Probst, a BDO board member, told the BBC.
While no solution has been reached to deal with the crisis, Mr Probst suggested the country employ young immigrant workers and more women to avoid economic problems.
Germany has one of the highest migration rates in the world, but has also seen growing support for anti-immigration party Alternative fur Deutschland, the BBC said.
Last Friday's study underlines the challenges Western nations face in competing with rapidly growing emerging economies in Asia and other parts of the world.Ranked according to their attractiveness to entrepreneurs, Switzerland came in top among 174 places, followed by Singapore and Hong Kong. Germany, Europe's biggest economy, ranked 11th, and the United States was 14th, according to the report.
The researchers looked at variables, including political stability, education, health, population trends, business and work freedom, regulatory quality and inflation, to arrive at their findings.
Bloomberg
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