Taiwan is set to surpass Japan as Asia's fastest aging nation this decade, experts warn, as a dwindling labor force poses a structural challenge to economic growth.
"An imminent issue Taiwan will face is population aging, it seems the aging trend is unfolding faster than forecasted," Societe Generale economist Claire Huang said in a recent note.
Huang says the population of working-age residents, or those between 15 and 64 years of age, will shrink 7.3 percent by 2025, above the 7.2 percent contraction expected for Japan. While Taiwan's figure seems alarming, it comes as no surprise; Huang notes that growth was barely above zero in 2014 after hovering below 1 percent for most of the past decade.
In a report last year, HSBC noted that the East Asian 'tigers' (South Korea, Hong Kong, Taiwan and Singapore) were expected to age at rates even quicker than that of Japan.
Studies of other population metrics in Taiwan also reveal worrisome trends. Total fertility rates, the average number of children born per woman, were the third lowest in the world last year, according to the CIA World Factbook, 14 places below Japan.
Taiwan's National Development Council predicts the country will achieve 'aged society' status by 2018, which requires 14 percent of the population to be aged 65 or older. By 2025, the council expects the elderly to exceed the 20 percent mark, which will see Taiwan become a 'super-aged society.'