Saturday, January 21, 2006

Higher Birth Rate in Estonia

Estonia, who pursues one of the more consistently free market policies in the world have long been very successfull economically, with a average GDP growth rate of 6.5% in the 5-year period 2000-2004, which accelerated to about 10% in 2005. These numbers are even more impressive considering that Estonia due to a low birth rate and net emigration have had a shrinking population, making the relative GDP per capita growth rate even higher.

Still, while the shrinking population makes the GDP numbers even more impressive, it is not really a good thing particularly since it disproportionally affects the younger generations and so will increase the future burden of old age retirees. And for a country as small as Estonia (1.34 million), having its population shrink further is naturally a concern.

It is therefore good that the positive economic trend now have been followed by a positive trend in the number of births. According to preliminary figures on Statistics Estonia's data base, som 14,391 babies were born in Estonia during 2005, a 2.4% increase from the 14,055 babies born in 2004. That in turn was a 6.5% increase from the mere 13,196 born in 2003.

The birth rate is still too low, but the economic success created by the country's free market reforms seem to have translated into a turnaround in its previously troubling population trends. With the economy booming, net emigration should soon end too, just like it did in Ireland.


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