Moody’s: India’s aging population due to low fertility rates affects global economy
GS3Economy · S&T · Environment · Security· Growth, inflation & macro indicators· Prelims + Mains·
Demographic shift and its impact on productive capacity: a key GS3 Economics and demographic study.
Why in news
Moody’s Ratings stated that India's population will age significantly by the end of the century due to fertility rates falling below replacement levels, impacting global economic growth and creditworthiness.
Background
Moody's Ratings reported that declining fertility rates will reduce India's productive capacity and weaken consumer demand. Over 70% of the world's population currently resides in countries with fertility rates at or below replacement levels.
Facts for Prelims
- FactMore than 70% of the world's population lives in countries with fertility rates at or below replacement levels.
- FactCountries identified with similar fertility trends include Japan, South Korea, China, Brazil, India, Thailand, and Türkiye.
- FactMoody's Ratings identified declining fertility as a factor affecting India's creditworthiness and productive capacity.
Prelims practice question
With reference to global fertility trends, consider the following statements:
- Moody's Ratings identified declining fertility as a factor affecting India's creditworthiness.
- More than 70% of the world's population lives in countries with fertility rates above replacement levels.
- India's population is expected to remain young due to high fertility rates by the end of the century.
Which of the statements given above is/are correct?
- (a)1 only
- (b)1 and 3 only
- (c)2 and 3 only
- (d)1, 2 and 3
Show answer
Answer: (a) 1 only — Statement 1 is correct. Statement 2 is incorrect: The note states more than 70% live in countries with fertility rates at or below replacement levels. Statement 3 is incorrect: The note states India's population will age significantly due to fertility rates falling below replacement levels.
For Mains
Q. Discuss the economic implications of a declining fertility rate and an aging population on India's long-term growth and global creditworthiness.
Dimensions to cover in your answer
- Demographic dividend reversal: Shrinking workforce size leading to reduced productive capacity and labor shortages.
- Consumption contraction: Reduced consumer base weakening domestic demand and impacting private investment cycles.
- Fiscal pressure: Increasing dependency ratio necessitating higher public spending on geriatric healthcare and pensions.
Keywords: Demographic Dividend · Replacement Level Fertility · Creditworthiness · Productive Capacity · Dependency Ratio
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This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.