Baby bust: Germany’s population shrinks for the first time in 10 years.

Germany’s population shrank for the first time in a decade after the coronavirus pandemic triggered a sharp drop in immigration this year, accelerating the country’s recent demographic slowdown, according to data published on Tuesday.

The number of people living in Germany fell by 40,000 in the first six months of this year to 83.1 million, which the Federal Statistical Office said was the first decline in the population of Europe’s largest economy since the second half of 2010.

Germany has long been grappling with a Japanese-style combination of low birth rates, an ageing society and a stagnant population of working-age people, which economists say raises concerns about productivity, growth and public finances in the future.

“Population growth, if you translate that into the size of the labour force, is one of the major drivers of economic growth,” said Florian Hense, economist at Berenberg. “If German population growth has stalled and gone into reverse, that points to weaker growth in future.”

However, he said Japan had shown how a country can deal with a shrinking population by integrating more people – such as women and older people – into the workforce. “I wouldn’t be surprised if the German government continued with its policy of raising the retirement age,” he said.

Arrivals

The main cause of the recent decline in German inhabitants was a sharp drop in the number of arrivals from other countries since the pandemic started in March.

In the first six months of the year, there was a 29 per cent fall in the number of immigrants arriving in Germany to 529,000, while the number of people emigrating out of the country fell 22 per cent to 455,000.

That means Germany had net immigration of 74,000 people in the first half of this year – less than half the net immigration of 167,000 in the same period last year.

“Just like the slump in migration across Germany’s borders, the decline in population in the first half of 2020 is concentrated in the months from March to May,” the statistics agency said. It added that in June, after the national lockdown was lifted, the population rose again by 4,000 people, but this was still below the 14,000 increase in June 2019.

For several years, the natural demographic decline caused by Germany’s low birth rate has been more than offset by large numbers of immigrants – especially after the country agreed to accept more than 1 million mainly Muslim migrants during the 2015-16 refugee crisis.

The influx of refugees, many of them Syrians who prefer larger families, combined with more generous childcare and parental leave policies to boost Germany’s fertility rate from 1.33 children per woman in 2007 to 1.57 a decade later – taking it slightly above the EU average.

Fertility rate

However, Germany’s fertility rate has started to slip again for the past couple of years, while net immigration has also been slowing recently, adding to the downward demographic trend.

The country’s net immigration fell by almost a fifth last year to slightly more than 327,000 people, the lowest number since 2011 and well below the peak of more than 1.1 million people in 2015.

The number of deaths in Germany was 112,000 higher than the number of births in the first half of this year, up from 105,000 a year earlier.

Meanwhile, the number of people aged 85 and over in the country has doubled from 1.2 million in 1999 to more than 2.4 million last year, rising much faster than the 50 per cent increase in people aged over 65 and pushing up pension and healthcare costs for the state.

The statistics agency warned that the disruption of the pandemic may have caused a “delayed recording of migration cases”, adding: “It cannot therefore be ruled out that there will be catch-up effects in the recording of immigrant residents.”

– Copyright The Financial Times Limited 2020

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