Greying Japan expects spike in birth rate for 2006

TOKYO (Reuters) - Japan, with a shrinking and aging population, is likely to report a rise in births for last year after a record low in 2005, the Health Ministry said on Wednesday.

The fertility rate -- the average number of children a woman bears in her lifetime -- was "highly likely" to have risen to at least 1.3 in 2006 from an all-time low of 1.26 in 2005, a ministry official said.

The estimate was based on preliminary figures showing the number of babies born last year had risen by 32,041 to 1,122,278, the first increase in six years.

The official attributed the rise to a recovering economy encouraging more couples to marry and have children, but said the population was still set to shrink in coming years as the country ages at an unprecedented pace.

A final figure for the fertility rate will be published in early June.

Japan, with the world's highest proportion of old people and lowest proportion of young people, has seen its population shrink since peaking in 2004.

Demographers say a fertility rate of 2.1 is needed to keep a population from falling.

Japan's declining population has raised concern over its longer-term economic growth potential and the government's ability to fund its ballooning pension requirements.

But how to tackle the issue has been a headache for the government, with the health minister causing a public uproar recently by calling women "birth-giving machines" when talking about the low fertility rate.