Population Growth Slowdown To Affect Healthcare Spending

BMI View : It is vital that the French government pays attention to its falling birth rate, rising death rate and subsequent slow down in population growth. Not only is the total population of a country a key variable in consumer demand, but an understanding of the demographic profile is key to understanding issues ranging from future population trends to productivity growth and government spending requirements, such as the healthcare budget.

In Europe, the replacement rate birth rate is considered to be 2.1 children per woman. Data published by France's National Institute of Statistics and Economic Studies (INSEE) reveals that in 2013, France's birth rate fell under the symbolically important figure of 2.1 and as a result the country recorded the lowest population growth in a decade. France's population reached a value of 66mn inhabitants on January 1 2014, up by 280,000 residents or an increase of 0.4% from the previous year.

In 2013, 810,000 births were recorded in France, down by 11,000, from 821,047 births in 2012. INSEE attributed this to a decline in the total fertility rate (TFR) per woman and a decrease in the number of women of child bearing age. In 2013, the TFR fell to 1.99 children per woman, from 2.01 in 2012 and 2.03 in 2010. In 2013, the average age of mothers at birth reached 30.1 years, an increase of 0.6 years in a decade. Between 2003 and 2013, the number of women aged 15 to 50 years decreased by 1.6% and the number of women aged between 20 to 40 years decreased by 3.8%.

Slowing Down
France: Number Of Births

Population Growth Slowdown To Affect Healthcare Spending

BMI View : It is vital that the French government pays attention to its falling birth rate, rising death rate and subsequent slow down in population growth. Not only is the total population of a country a key variable in consumer demand, but an understanding of the demographic profile is key to understanding issues ranging from future population trends to productivity growth and government spending requirements, such as the healthcare budget.

In Europe, the replacement rate birth rate is considered to be 2.1 children per woman. Data published by France's National Institute of Statistics and Economic Studies (INSEE) reveals that in 2013, France's birth rate fell under the symbolically important figure of 2.1 and as a result the country recorded the lowest population growth in a decade. France's population reached a value of 66mn inhabitants on January 1 2014, up by 280,000 residents or an increase of 0.4% from the previous year.

In 2013, 810,000 births were recorded in France, down by 11,000, from 821,047 births in 2012. INSEE attributed this to a decline in the total fertility rate (TFR) per woman and a decrease in the number of women of child bearing age. In 2013, the TFR fell to 1.99 children per woman, from 2.01 in 2012 and 2.03 in 2010. In 2013, the average age of mothers at birth reached 30.1 years, an increase of 0.6 years in a decade. Between 2003 and 2013, the number of women aged 15 to 50 years decreased by 1.6% and the number of women aged between 20 to 40 years decreased by 3.8%.

Slowing Down
France: Number Of Births

Population Growth Is Vital

While France still remains the second most fertile nation in the EU after Ireland, and is in a better position that shrinking countries such as Germany (TRF of 1.36 in 2011) and Italy (TRF of 1.41 in 2011), the drop in births may act as a blow to Europe's number two economy. France relies heavily on domestic consumption, supported by population growth, for economic growth.

Population Pyramid
2013 (LHS) And 2013 Versus 2050 (RHS)

Furthermore, in the long term, a decline in population growth may act as a drag on France's economy as a result of a decline in the number of working age citizens contributing to social service funds. The life expectancy of French women rose to 85 years, up 2.1 years in the past decade, while it rose to 78.7 years for men, up 2.9 years in the same period.

Population Indicators
Population (mn, LHS) And Life Expectancy (years, RHS), 1990-2050

On a regional basis, the effective economic old-age dependency ratio for the EU27 is projected to rise sharply, and it is estimated that by 2050 there will be only two working age citizens for each elderly person in the EU, instead of the current four. With regards to the France, the ageing profile ratio (the ratio of the population aged under 15 to that aged over 65) is expected to drop from 1.1 in 2005 to 0.7 by 2050, similar to that of the UK (1.1 in 2205 to 0.8 in 2050) and more positive than that of Germany (0.8 in 2005 to 0.4 in 2050).

France's Key Population Ratios, 1990-2020
1990 1995 2000 2005 2010 2013e 2015f 2020f
Dependent ratio, % of total working age 51.5 53.5 53.7 53.7 54.2 56.5 58.3 61.9
Dependent population, total, '000 19,313 20,227 20,699 21,466 22,230 23,206 23,929 25,453
Active population, % of total 66.0 65.1 65.0 65.1 64.8 63.9 63.2 61.8
Active population, total, '000 37,532 37,782 38,514 39,979 41,001 41,085 41,053 41,117
Youth population, % of total working age 30.1 30.2 29.1 28.4 28.3 28.5 28.6 29.0
Youth population, total, '000 11,281 11,422 11,215 11,367 11,605 11,702 11,758 11,908
Pensionable population, % of total working age 21.4 23.3 24.6 25.3 25.9 28.0 29.6 32.9
Pensionable population, total, '000 8,033 8,805 9,484 10,099 10,625 11,503 12,171 13,545
e/f = BMI estimate/forecast. Source: World Bank, UN, BMI
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