Germany Faces Demographic Shift: Workforce Shrinks as Senior Population Grows

Germany's working-age population is projected to decrease by 2% by 2045, while the population aged 67 or above will grow by 13.6%. This demographic shift, driven by low birth rates and an ageing population, will pose significant challenges for the economy, including workforce shortages and the need for age-appropriate housing.

Germany will see its working-age population decrease by 2% by 2045, according to a forecast released on Wednesday that is likely to add to fears over growth constraints in Europe's largest economy. Though its overall population will grow by 0.9% or 800,000 people within that timeframe due to net migration, the number of people between 20 and 67 years old is set to fall by 2%, the study from the federal institute for research on building, urban affairs and spatial development (BBSR) showed.

The number of people aged 67 or above and therefore eligible for retirement, on the other hand, will grow by 13.6% or 2.2 million people, according to the forecast. German officials have warned that the biggest challenge for the economy will be growth constraints due to a workforce shortage, with some 1.57 million jobs currently unfilled.

In 2023, net migration to the country compensated for its Germany's birth rate and ageing population, leading to a rise of 300,000 to a new record of 84.7 million people. Germany is "becoming older and more diverse," said Construction Minister Klara Geywitz.

The challenges facing the country over the next two decades will include "securing skilled workers, integration, more age-appropriate housing, digitization across the country and adapting social infrastructures," Geywitz said.

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