Sweden’s population forecast to hit 10 million: ageing crisis averted?
Sweden is only a few months away from hitting a 10 million-strong population. This is great news in the short-term, as it’s a plausible explanation for Sweden’s currently booming economy, and it’s also (potentially) good news for the future: Sweden, like most of the rest of Europe, is facing an ageing crisis.
Sweden’s population will hit the ten million mark in the next few months
SOURCE: Statistics Sweden
An ageing crisis, broadly speaking, is what happens when your population begins to skew heavily towards the more elderly members of society. The reason it’s a crisis is because, for every person who can no longer work, there has to be a suitable number of working-age people available to provide for him or her. This is true at a national level – as in, taxes paying towards pensions and healthcare – and it’s true at a personal level – as in, people who are literally able to care for the elderly.
Sweden’s impending clearance of the 10 million-person-hurdle is down, primarily, to an enormous influx of immigrants. But that’s not the whole story: the country’s birth rate, bolstered by gender-equity measures and generous parental leave, is now amongst the highest in Europe.
Baby Boom vs Migration Boom
Sweden already spends a significant amount of its income on the elderly – as life spans continue to increase, and the current swell of population ages into infirmity, extra young people will help to pick up the slack they leave behind. By 2060, a quarter of Swedes will be over-65. Today, it’s a fifth. This increase might not sound dramatic, but in the world of demographics, it’s incredible.
Anna Breman, chief economist at Swedbank AB, told Bloomberg:
“An increase in the number of people of working age can help counter the increased dependency burden that we’ll see as the number of elderly people grows. While we have the space for another one million people, we have a housing shortage in the big cities. The Swedish labor market is also very divided.”
In short: Sweden could be onto a good thing with its plethora of immigrants and respectable birth rate. But to make the most of it, the job market will have to be managed sensibly, with plenty of training for immigrants, and infrastructural and real-estate investment will have to appear to cope with the influx of numbers.
These are challenges; but they’re challenges Germany and Japan would kill for.
The opinions in this article do not reflect those of Dominion Fund Management Limited, and in the instance of any forward-looking statements, these should not be construed as advice.
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