The Asian Development Bank, via its latest Asian Development Outlook, is urging the Singapore government to spend more to spur domestic demand and rein in its current account surplus. But the latest population data shows just why the government remains cautious. The coming demographic challenge is getting more menacing by the year, with the world’s fifth-lowest birth rate after Monaco, Japan, Andorra and South Korea.

Short-term demand weakness, notably in the construction sector, helps explain why for the first time in many years the number of non-residents has fallen by some 27,000 or 1.6 percent over the past year. This should also be politically popular given the levels of popular resentment seen over overcrowding and the alleged misdemeanours of some of the low-skill work permit folders who do most of the dirty, dangerous and domestic work and constitute almost one third of the workforce.

In other respects, Singapore remains barely in a demographic sweet spot. The number of citizens has risen by 0.8 percent while there was only a minimal increase in Permanent Residents. Thus for the first time in years the citizen percentage of the population has risen. It is not clear how much of that was natural and how much via grant of citizenship to permanent residents. Benefitting the economy is that the percentage of those in the 20-64 working age group rose by 0.4 percent even though the total population rose by only 0.1 percent.

However, looking ahead the situation continues to deteriorate. The median age of residents (citizens plus permanent residents) rose from 40.0 to 40.5 years and the percentage of people under 20 continued to fall. More ominously still, the fertility rate has yet to respond either to exhortation or fiscal incentives. The crude birth rate fell from 9.7 to 9.4 per thousand, and the fertility rate from 1.24 to 1.20, only 60 percent of the level needed for natural replacement.