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The number of babies born in Japan fell below 1 million in 2016 for the first time since records began in the 19th century, underscoring the demographic challenges facing the nation with an aging and declining population.

There were 976,979 babies born last year in Japan, the fewest since the government started tracking the data in 1899, according to labor ministry data released on Friday.

The declining birth rate and aging population combine to reduce the nation’s possible labor force and pushes up welfare costs. Prime Minister Shinzo Abe’s administration is aiming to lift the birth rate per woman to 1.8 in a bid to ease the shrinking population, from the 2016 level of 1.44.

“The report demonstrates afresh that Japan’s demographic problems are extremely serious,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo. “There’s a high chance that the population declines will continue in a sustained manner. Japan needs to seriously deal with social security and fiscal issues and find a way to improve the nation’s growth rate.”

Other Details: Births are about a third of their 1949 peak of 2.7 million

The total fertility rate, or the average number of children born to a woman who lives through her childbearing years, fell to 1.44

The birthrate among women aged 30 to 34, which had been on an uptrend, fell for the first time in 11 years

Link to report (Japanese language):