The silent crisis: The impact of declining birth rates on Sweden’s economy and welfare

In December, the Committee for a Future with Children published its first publication on how declining birth rates are affecting Sweden’s economy and welfare system. The report shows that Sweden is heading toward an ageing and shrinking population, a trend that could have profound economic consequences if current demographic patterns persist. According to the analysis, GDP at the next turn of the century could fall to less than half of what would be expected under stable demographic conditions, significantly constraining both fiscal and monetary policy. While technological development and migration may ease some of the pressure, the Committee stresses that neither can fully compensate for a shrinking labour force and declining birth rates. An ageing society will place growing strain on public finances, reduce the effectiveness of monetary policy, and increase the risk of long‑term stagnation. Ultimately, the Committee concludes that Sweden must begin adapting now and adopt more ambitious reforms to increase fertility, strengthen long‑term growth, and secure the future foundations of the welfare system.