Taiwan's population set to halve by 2075, warns National Development Council

Taiwan's population is projected to shrink by nearly half over the next five decades, falling to 12.15 million by 2075. The National Development Council warns of deepening labour shortages and a rapidly aging workforce that will challenge the economy's growth model.

Taiwan's population is projected to shrink by almost half over the next five decades, intensifying labour shortages and placing a growing drag on economic growth as the technology-intensive economy confronts a rapidly aging workforce, the National Development Council said yesterday.

The population is expected to fall to 12.15 million by 2075, a 48 per cent decline from this year, according to the council's projections. The decline would fundamentally alter Taiwan's workforce. From 2037, more than half of the working-age population is projected to be aged between 45 and 64, signalling the end of an era when the economy could rely on a relatively large labour force.

The shift threatens to challenge Taiwan's growth model, which depends on a broad manufacturing workforce and a growing supply of highly skilled workers to support its semiconductor and artificial intelligence industries, the council said. A shrinking pool of workers could make recruitment increasingly difficult, while a growing elderly population would add pressure on social spending and public finances.

The projections also point to a deeper demographic problem — Taiwan is not only losing its population but failing to replenish it, the council said. It lowered its long-term fertility assumptions after the fertility rate fell to a record low 0.695 last year, significantly below previous estimates. The number of women aged 20 to 49 has declined since peaking in 2005, while the proportion of married women in that age group has also fallen. The shrinking pool of potential mothers is making a sustained recovery in births increasingly difficult, it said.

Taiwan's population is projected to fall below 20 million in 2045, dropping to 19.98 million. At that point, people aged 65 or older are expected to account for 37 per cent of the population, while the working-age population would shrink to 57.9 per cent and children to just 5.2 per cent, the council said. By 2075, the imbalance would be even more pronounced, with older people projected to comprise 52.9 per cent of the population, working-age people 42.3 per cent and children 4.8 per cent.

The dependency ratio — the number of children and elderly people relative to those of working age — is projected to rise from 55.2 dependents for every 100 working-age people to 136.6 by 2075, the council said. The potential support ratio is expected to fall below one, suggesting less than one working-age person for every person aged 65 or older.

The government is preparing the economy for a permanently smaller workforce. It has established a population strategy task force, and in May launched 18 measures covering childbirth support, childcare, education, workplace policies and housing. Additional policy packages would target elderly people, talent development across all age groups and the recruitment of overseas talent, the council said. For businesses, the implications extend beyond hiring. Companies are likely to face greater pressure to raise labour force participation among elderly people, attract workers from overseas, and accelerate automation and productivity gains.