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Moody's: India's Fertility Decline Signals Older Future
29 Sep
Summary
- India's age structure is shifting due to falling fertility rates.
- Lower fertility impacts economic growth and weakens demand.
- A significantly older population is projected for India this century.
India's demographic landscape is evolving, with fertility rates now below the replacement level, signaling a future marked by an aging population. Moody's Ratings highlights this shift, noting that population growth has historically supported economic expansion, but declining fertility alters this dynamic.
Fewer workers will constrain productive capacity, while a decrease in households and consumers will dampen demand. Consequently, economic growth will increasingly depend on productivity gains. Globally, fertility rates have fallen significantly, with over 70 percent of the world's population residing in countries with fertility at or below replacement.
While India's population remains relatively young, the demographic transition is underway. Emerging markets, including India, are following a path similar to developed economies like Japan, China, and Korea, which are already experiencing significant population aging. This trajectory suggests a future where India will contend with the challenges and opportunities of an older demographic structure.
