Italian Government's demographic problems

Marcus Roberts
May 25, 2018
Reproduced with Permission
Demography is Destiny

As a new Italian government is being formed, one whose populist credentials are sending shivers down spines in Brussels, the talk is all about economic reform. Will the new coalition government break out of the Eurozone monetary and economic rules, and if it does, what will the rest of the Eurozone do about it?

There has also been much discussion about what the new government's immigration laws will look like and what effect this will have on the migrant route from Africa across the Mediterranean to Italy. But one important issue that the new government will have to turn its attention to at some point is demography, in particular, the country's shrinking and ageing population.

According to the Agenzia Nazionale Stampa Associata (ANSA), the leading wire service in Italy, Italy's population is shrinking: in 2017 the population fell by around 100,000 to 60.5 million. This was the third consecutive year that the population fell. According to the National Institute of Statistics, this decline is unlikely to be reversed in the coming years - it forecasts a population of anywhere between 46.4 and 62 million people by 2065, but with only a nine percent chance of the population actually increasing. The "medium-term" scenario is that the population will decline by 6.5 million people (to 54 million) by 2065.

Not only is the country shrinking, but it is also getting older. Italy now has the second largest population of over 65-year-olds in the world (as a proportion of its population), behind only Japan. There are now 168.7 elderly for every 100 young people. With an increasing life expectancy (men and women are expected to live on average about 5 years longer in 2065: 86.1 years for men and 90.2 years for men) and with a fertility rate of 1.34 children per woman (well below the replacement rate of 2.1) there is little chance that the population will get any younger in the future. All of this makes positive economic change more difficult and makes it more likely that tensions between the new government and Brussels will be exacerbated.