Tuesday, 02 January 2024 12:17 GMT

France warns of demographic crisis amid falling birth rates


(MENAFN) France’s Court of Auditors (Cour des comptes) raised concerns on Tuesday over the country’s declining birth rates, cautioning that the nation may be approaching a “demographic tipping point” with serious implications for already fragile public finances.

Auditors urged authorities to confront the issue, noting that falling birth rates combined with an aging population are likely to widen the gap between public revenues and expenditures, according to reports.

Since January, cumulative births in France have reportedly fallen by 2.3% compared with 2024, while the fertility rate last year stood at 1.62 children per woman—the lowest level since the end of World War I.

The auditors highlighted that a shrinking working-age population, projected to fall to 50% by 2070 from 55.3% in 2023, will have significant economic consequences. They emphasized that “the size of the working-age population is a primary factor in the erosion of tax and social-security revenues. Since the employed population determines the wealth produced, its relative decline mechanically leads to lower public revenues.”

Social protection systems are expected to be the first to feel the impact, as they are largely funded through contributions from workers’ labor income. Auditors also warned that public spending could rise to 60.8% of GDP by 2070 if per-capita expenditure by age group remains unchanged. Conversely, maintaining the current ratio of 57% would require reducing per-capita public spending by as much as 6.1% by 2070.

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