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The big baby bust

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Fewer babies, slower growth.

Fewer babies, slower growth. In much of the world, people are having fewer babies. This isn’t necessarily something new; global fertility rates have been grinding lower for some time. But the scale of the decline over the past few years has been dramatic. For all of the risks for global growth that are present at the moment, few have such a dramatic impact on the medium-term outlook as this shift – which could mean the world’s population is more than 10% lower in 2050 than UN baseline estimates and could mean that annual population growth rates for the next 25 years could be roughly 0.4ppt lower if birth rates keep falling at this pace.

Pandemic Booster. The pandemic has accelerated things, and the number of births per woman has fallen sharply in some economies and continues to grind lower in others. In some cases, the fertility rate has already fallen to remarkable levels – with Korea standing out with a fertility rate of just 0.87 children per woman expected in 2022. That would be enough to cut Korea’s population by 60% by the end of this century.

A world-wide issue. And more economies are going to be facing this issue. The UN’s latest forecasts showed a drop in fertility rate assumptions and the impact may be seen in terms of total population figures in the coming years – with far fewer babies being born.

How bad could things get? The drop in the world fertility rate means that between 2022 and 2025, more than 14m fewer babies are set to be born in the world than the UN expected previously. The impact could become much more entrenched further out and lower fertility rates could mean halving of many populations during the rest of this century.

Peaking sooner. It also means the world’s population may peak much sooner. The UN suggests a global peak in the 2080s and we’d previously said 2050s would be likely. Taking into account the updated 2022 data for fertility rates and the possible outcomes in the coming years, our assumption is now for the world’s population to peak in the late 2040s.

Macro spillovers. Policy may have to react, but it’s not so easy given that various attempts in recent decades have failed to see a notable rise in birth rates. We can hope that this changes, or that more flexible working means birth rates do rise. But unless we shift from this current path, global population growth may be much weaker than current models suggest, with big implications for activity growth, government finances and the planet’s resources.


First published 22 August 2022.

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