Demographic crisis will stunt growth, harm pensions, create labor shortage

The grim demographic milestones that Ukraine will reach by 2020 is pushing population issues to the forefront of the nation’s economic debate as it could see growth stunted due to labor shortages with debt implications for its pension and health systems.

Consumer market strategy researcher Euromonitor International stated in a recent report that Ukraine will experience the largest absolute population loss in Europe between 2011 and 2020, which will adversely impact the country’s long-term economic growth.

Having already experienced an 11.8 percent population decline between 1991 and 2011, from 51.6 million to 45.5 million, Euromonitor reported, Ukraine’s population stands to fall by about 200,000 annually, dropping to 44.5 million people by 2020 due mostly to the long-term trend of the death rate exceeding the birth rate.

In an even more dramatic forecast, the United Nations projects that Ukraine’s population will decrease to 35 million by 2050. Despite two years of economic growth, the birth rate was 1.4 in 2011, still below the replacement level of 2.2.

Outgoing migration, principally among the young working age population in the 1990s has also exacerbated population decline. And the smaller birth generation during the 1990s that has recently joined the labor force coupled with few incoming labor migrants is fueling the present and future labor shortages.

“Every year 200,000 thousand more people die (in Ukraine) than are born,” said Rumane Verikaite, a Euromonitor data analysis manager.

Read rest of article: http://www.kyivpost.com/news/business/bus_focus/detail/125560/#ixzz1rH73bwCH