Germany’s population shrank last year for the first time since 2011 due to a sharp drop in immigration during the coronavirus pandemic.
The number of people living in Germany fell by 12,000 to 83.2m, according to the Federal Statistical Office, underlining how the Covid-19 crisis accentuated the demographic pressures weighing on Europe’s largest economy.
However, the German population is expected to return to growth by next year, boosted by the expected lifting of travel restrictions and a sharp rebound in economic growth, the country’s central bank said on Monday.
The first decline in the country’s population for a decade was mainly caused by a 29 per cent fall in net immigration to 209,000 last year. Part of the fall was due to a sharp drop in the number of foreign students attending German universities last September, which was down 99,400, or 21 per cent, from the previous year.
Since Germany started to lift most of its pandemic lockdown measures, some companies have found that a lack of staff is hampering their reopening plans — in particular at hotels, restaurants and bars in big cities such as Berlin.
Meanwhile, the number of deaths outnumbered births by 212,000, up from 161,000 the previous year. “Despite the increased mortality in connection with the corona pandemic, the number of elderly people continued to grow in 2020,” the statistical office said. The number of people aged 80 and over rose 4.5 per cent to 5.9m, pushing up pension and healthcare costs for the state.
Germany has long been grappling with a Japanese-style combination of low birth rates, an ageing society and a stagnant population of working-age people, which economists say are likely to weigh on its growth rate and the sustainability of its public finances in the future.
A report from government advisers this month warned that Germany would have to deal with “shocking increases in financing issues for the statutory pension system from 2025 onwards” and proposed raising the national retirement age to 68.
The country is already planning to steadily raise the retirement age from 65 to 67 and finance minister Olaf Scholz dismissed the latest proposal, saying it was “not only based on wrong calculations, it’s also socially unfair”.
Carsten Brzeski, head of macro research at ING, said: “The recent debate about the sustainability of the pension system shows what we all know already: Germany has a big problem with its pay-as-you-go pensions, particularly with low or negative interest rates.”
For several years, the natural demographic decline caused by Germany’s low birth rate has been more than offset by large numbers of immigrants — especially after the country agreed to accept more than 1m mainly Muslim migrants during the 2015-16 refugee crisis.
The German central bank said in its monthly report on Monday that “temporarily depressed immigration is expected to pick up quickly” next year, when it forecast that net immigration would rebound to about 300,000 people.
Predicting that the German economy would grow 5.1 per cent this year and 3.7 per cent next year, the Bundesbank said Europe’s largest economy would return to its pre-pandemic level of gross domestic product by the third quarter of this year.