(Bloomberg) -- The number of births in Japan fell to a post-war low last year, a worrying sign for a country facing a financial crunch due largely because it has the world’s fastest aging population.
The number of children born last year was at almost 920,000, down from about about 2.7 million in the late 1940s, data released Friday by the Ministry of Health, Labor and Welfare showed. Japan’s population was set to slump by almost a third by 2060, by which time about 40% of residents will be 65 or older, according to the National Institute of Population and Social Security Research.
Japan’s graying population has propelled a surge in social security spending, accounting for about one-third of government outlays in the fiscal year that ended in March, much of which was funded by debt. Failure to buck current trends could see Japan’s working population collapsing by more than 40 percent to 38 million by 2060.
The government is looking to ease the world’s biggest debt load and strengthen the social safety net by raising the sales tax from 8% to 10% in October, a risky political move. Two previous hikes have sent the economy into reverse.
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