Japan sees steep population drop as pandemic keeps foreigners away

Nikkei -- Feb 05
Japan's population shrank by a record 420,000 people last year, government estimates show, as the coronavirus pandemic dealt a heavy blow to an influx of foreign workers that had helped offset the country's ongoing natural population decline.

The total fell for a 12th straight year, shattering the previous record of 329,000 set just a year earlier. The health ministry estimates Japan's population at 125.57 million as of Jan. 1, based on confirmed data through July and estimates based on births, deaths and foreign arrival and departure data.

The drop owes in large part to a 60% plunge in foreign arrivals that has kept the labor market tight even though the pandemic has slowed the economy and eliminated many jobs.

The natural rate of decline -- or the difference between births and deaths -- was about on par with 2019 during the first seven months of the year. But net foreign arrivals to the country tumbled more than 40% over that period to 115,000 amid entry restrictions aimed at curbing the spread of the virus.

The influx of foreign workers in recent years had alleviated labor shortages in a range of industries, including restaurants, convenience stores, manufacturing and construction.

This year is expected to see a significant drop in birth rates. Reported pregnancies fell 5.1% on the year to about 727,000 for the 10 months through October, according to the health ministry, with a particularly steep decline starting in May.

Dai-ichi Life Research and the Japan Research Institute both see births falling below 800,000, beyond 2019's record low of 865,000. The accelerated population decline may continue into next year.

- Nikkei