German population set to shrink 5% by 2050

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Germany’s population is projected to shrink by nearly 5 per cent within 25 years — a significantly steeper decline than previously forecast, according to an Ifo study.

The German economic think-tank on Tuesday revised its forecast for a 1 per cent population decline by 2050 to nearly 5 per cent — a drop that would leave Germany with its smallest population since 1990. The revision is based on updated figures from the country’s statistical office.

“Demographic change will have significant effects on all areas of the economy and society,” Ifo economist Joachim Ragnitz warned in the study.

Germany’s growth rate, projected to hover around just 0.4 per cent in the long term, is likely to face further strain as the labour market comes under pressure from demographic decline. The number of people aged 20 to 66 is projected to fall by about 12 per cent, while the number of pensioners is set to rise by more than 20 per cent, Ifo said.

Germany’s pay-as-you-go pension system is likely to come under increasing strain. The government already devotes about a quarter of its budget to supporting it, and the Federal Audit Office warned in 2024 that this share would rise further.

Ragnitz called on policymakers to urgently take the “accelerated decline and ageing of the population” into account, particularly in healthcare and long-term care.

By 2050, Germany’s population will fall by more than 4mn to about 79mn, the lowest level since the early 1990s. The expected slump is more pronounced because older forecasts were based on erroneously inflated estimates of Germany’s current population, which the statistical office now estimates at 83mn in 2025, compared with 85mn previously. 

The inflow of migrants by 2030 is now expected to be significantly lower than previously forecast after the government tightened migration policy. Birth rates, too, were overestimated in earlier projections, with the new data pointing to 150,000 fewer births in 2030 than previously expected.

According to Ifo, in 2025 Germany attracted only 225,000 net migrants compared with 454,000 in the previous estimate. This number is expected to increase to 250,000 a year within the next 25 years.

Eastern Germany will bear the brunt of the decline, while the effect will be less pronounced in larger urban centres further west.

This article has been amended to correct the timeframe referenced in the introduction