India to have more older population set as fertility falls below replacement: Moody’s

India is likely to have a much older population later this century as its age structure begins to shift after fertility fell below the replacement level, according to Moody’s Ratings released on Tuesday.

The ratings agency said population growth has long supported economic growth and creditworthiness, but declining fertility is now changing the scenario. A smaller working-age population could restrict productive capacity, while fewer households and consumers could weaken demand.

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This means countries will increasingly need to depend on productivity gains to sustain economic growth, Moody’s said in a report on global demographics.

“Although India's population remains relatively young, fertility has already fallen below replacement and the country's age structure is beginning to shift, setting the stage for a much older population later this century,” according to Moody's statement.

The global fertility rate has fallen sharply, from 4.9 children per woman in 1950 to around 2.2 currently, which is only slightly above the replacement rate of 2.1, according to Moody’s.

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“What makes this episode particularly significant is that many of the world’s largest economies are aging at the same time. In fact, more than 70 per cent of the world's population now lives in countries with fertility rates at or below replacement level,” according to Moody’s report on global demographics.

The agency said several East Asian countries have recorded some of the lowest fertility rates ever seen and much of Latin America can now be compared to Europe and Japan in this aspect.

Japan has the oldest population structure, with nearly 30% of its population aged over 65 and around 11% below 15. South Korea is close behind, while China is also ageing rapidly.

Emerging economies including India, Brazil, Thailand and Turkiye are also progressing in the same direction.

Moody’s said declining fertility will eventually reshape both population growth and age structures and the countries witnessing the sharpest falls in fertility today are likely to experience the fastest ageing in the coming decades.