The global fertility rate is expected to decline to 2.8 children born per female in 2025 from 3.1 a decade ago. Among the top 20 economies, the rate will fall to just 1.7, well below the replacement level of 2.1 (the level at which a population replaces itself naturally). Saudi Arabia is projected to have the highest fertility rate in this group, driven by cultural values, historical pronatalist policies, and social factors. Traditional views have promoted larger families, but reforms under Vision 2030, which focus on women’s empowerment and economic shifts, are likely to gradually reduce fertility rates. In contrast, South Korea will continue to have the world’s lowest fertility rate at 0.7. This is driven by long working hours, entrenched patriarchal norms, and the world’s highest child-rearing costs as a share of GDP, making childbearing increasingly difficult.
Declining fertility brings challenges, including ageing populations, shrinking pools of working-age individuals, labour shortages and increased pressure on pension and healthcare systems. These factors may result in lower productivity, longer retirement ages and mounting pressures on public finances. At the same time, low fertility rates and smaller family sizes bring opportunities. Smaller families tend to yield higher disposable income per child, driving demand for premium goods and services and bespoke consumer experiences. Rising female workforce participation is expected to further enhance gender equality and boost household incomes. Moreover, the demographic shift offers opportunities to invest in technology, automation and skills development, ultimately fostering innovation and economic resilience, as evidenced by strategic initiatives in South Korea and Japan.
Check out the report, World in 2040: The Future Demographic, to gather insights on the most impactful demographic trends affecting the global consumer landscape up till 2040.