New Delhi: India could see a significantly older population later this century as its demographic structure begins to change following a decline in fertility below the replacement level, according to Moody’s Ratings.
The ratings agency said population growth has traditionally supported economic expansion and strengthened creditworthiness. However, declining fertility is changing this dynamic, with a smaller workforce potentially reducing productive capacity while fewer households and consumers could affect overall demand.
Global Fertility Rate Has Fallen Sharply
Moody’s said the global fertility rate has dropped from 4.9 children per woman in 1950 to around 2.2 today. This is only marginally above the replacement level of 2.1 children per woman.
According to the agency’s report on global demographics, more than 70 per cent of the world’s population now lives in countries where fertility rates are at or below the replacement level.
The trend is particularly important because many of the world’s major economies are ageing at the same time. Moody’s noted that fertility rates across large parts of Latin America have reached levels comparable with Europe and Japan, while several East Asian economies are experiencing some of the lowest fertility rates ever recorded.
Japan, Korea and China Among Countries Ageing Rapidly
Japan currently has the oldest population structure among the countries highlighted by Moody’s. Nearly 30 per cent of its population is aged above 65, while around 11 per cent is below 15.
South Korea is following a similar pattern, while China is also moving rapidly towards an older population structure.
The demographic shift is not limited to developed economies. Emerging markets such as Brazil, India, Thailand and Turkiye are also experiencing changes in fertility and population age structures.
India’s Demographic Structure Is Beginning to Change
India still has a relatively young population compared with several other major economies. However, Moody’s said the country’s fertility rate has already fallen below the replacement level, indicating that its age structure is beginning to change.
The agency said this trend could result in a much older population in India later this century. As the number of working-age people changes, economic growth will increasingly depend on productivity to compensate for slower growth in the workforce.
Declining fertility affects both the pace of population growth and the distribution of people across age groups. Countries experiencing the sharpest falls in fertility today are expected to undergo faster ageing in the coming decades.
Disclaimer
This article is based on information and findings attributed to Moody’s Ratings. Demographic trends can change over time, and the information presented here should be read in the context of the report cited.