Japan's population falls for second straight year

TOKYO, Aug 2 (Reuters) Japan's population has fallen for the second year in a row, the government said today, highlighting risks to the country's longer-term growth potential and its ability to fund growing pension requirements.

The population stood at 127.05 million on March 31, down by 1,554 over 12 months. Last year, the figure fell for the first time since the government began compiling the data in 1968.

Experts have long forecast that Japan's ageing population and its low birth rate meant its population would decline, shrinking the economy and leaving fewer workers to support a growing number of pensioners.

The proportion of the population who are 65 or older hit a record 21 per cent, the data showed, up from 20.3 per cent last year.

Japan already has the highest proportion of elderly people in the world, while its fertility rate stands at 1.32, far from the 2.07 needed to keep the population from falling.

The health ministry said in a report in December that the population was expected to shrink by 30 per cent to slightly below 90 million by 2005. It also said the proportion of elderly Japanese would surge to 40.5 per cent.

REUTERS PD RAI1815