Greece’s demographic problem threatening economic recovery

Greece’s aging population is seriously undermining the long-term growth prospects of the country’s economy, official data suggest amid warnings by prominent economists.

At the outset of the financial crisis in 2010, Greece’s active population – those aged between 20 and 64 – stood at 7.045 million people. Today that number stands at 6.8 million. People aged 20-40 years account for 40 percent of the population now compared to 46 percent in 2010.

And things are only likely to get worse, according to the United Nations, which forecasts that by 2025 the proportion of the active population in Greece will have dropped below 6.5 million, with only 2.3 million people forming the 20-40 age group. 

Moreover, the number of people aged 65 and over is expected to soar to 2.535 million by 2025 from 2.1 million in 2010 and 2.237 million in 2015. 

Greece’s falling birth rate has been highlighted as a serious problem by international organizations and prominent economists. 

Tellingly, the number of children up to the age of 4 is already on the slide, dropping from 585,000 to 503,000 in the period stretching from 2010 to 2015, while this figure is expected to plummet to 404,000 by 2025, according to projections by the UN. 

In Greece, the fertility rate – children per couple – stands at 1.26 compared to 1.49 in the European Union. According to the EU’s statistics agency Eurostat, Greece and Italy have the third lowest fertility rates in the EU, behind Germany and Portugal. 

In comments to Kathimerini, Zsolt Darvas, a senior economist at the Bruegel think tank, said Greece’s demographic problem poses a very real threat to the country’s fragile economic recovery. The dwindling of the population leads inexorably to a shrinking of the economy, investments and growth, he said. 

The same problem was highlighted by former International Monetary Fund official Bob Traa in an article for Kathimerini last month.

The country’s protracted economic crisis has resulted in a faster demographic slowdown than previously expected, Traa wrote, warning that it could take a full generation for the Greek population to stabilize from the impact of the “economic shock.”