A crisis is coming, and nothing can stop it. The consequences will be devastating.

• Low fertility rates are a natural stage of demographic change in developed societies.
• However, over the last 15 years the decline has been deeper than expected and has affected both rich and less developed countries.
• Analysts point out that this may result in slower economic growth and higher costs of servicing public debt.

Bank Pekao experts pointed out that low fertility rates are not surprising in affluent societies. It's a result of the so-called demographic transition. In short, the wealthier we are, the longer we study, the more effort we put into our careers, the later we start a family, and the fewer children we choose, which are increasingly expensive to raise.

However, over the last 15 years, something new has happened in demographics that we cannot explain well, they emphasize in their newsletter.

What's going on? Fertility rates worldwide have begun to decline much more dramatically than predicted, in both rich and poor countries, across diverse cultures and religions. "Moreover, virtually no public interventions have been able to reverse this trend, or even significantly slow it," they admit.

Many measures have been tried to stem the demographic crisis, including:

• child tax credits and financial benefits for parents;
• support in combining career with parenthood in the form of long parental leaves and/or the provision of affordable, universal and high-quality nursery and pre-school care;
• support in meeting the housing needs of young couples, e.g. in the form of subsidized mortgages or affordable rental apartments.

However, it turns out that none of these methods, or even a combination of them, has resulted in a significant increase in fertility in virtually every country where they have been used. The conclusion is that, as Pekao experts explain, people are becoming less willing to have children, and there's little that can be done about it.

The population of the entire world and the vast majority of countries will therefore shrink faster and earlier than demographers previously assumed - we read.

A catastrophic crisis is just around the corner. The consequences will be serious.

What economic and social consequences will this have? Pekao notes that the negative news is as follows:

• although the level of per capita prosperity in the world will increase, its rate of growth will decrease because fewer people mean less labor input into the production of goods and services;
• It also means a slowdown in technological progress – it's no coincidence that the world's main centers of research and development are large metropolitan areas. Moreover, if we assume that the distribution of talent in the population is constant, a smaller population means fewer potential scientific and technical talents and less newly discovered knowledge. AI could theoretically help here;
• the decline in fertility also means an aging population, and the older the population, the less likely it is to take risks, start businesses, etc. The dynamism of the major economies will likely decline;
• A slower rate of economic growth, in turn, means a greater problem with public debt. Currently, governments' main strategy for managing debt service is to hope that nominal GDP growth will exceed the interest rates on the bonds they issue. Over time, this will become increasingly difficult. Instead of real GDP growth of 3%, we will have to adapt to a rate of 1%. The example of Japan is very illustrative.

Experts also point out that if artificial intelligence is successful, relatively high economic growth can be expected to be maintained despite population decline.

"Then, servicing public debt shouldn't be such a problem. However, if the demographic crisis actually translates into an economic and fiscal crisis, it means that artificial intelligence hasn't threatened anyone (it hasn't taken our jobs - editor's note). In other words, it's not worth worrying about both things at once - if we're afraid of the effects of an aging population, we should support artificial intelligence," we read.