Last week, I shared my excitement about the new global population data published by the UN Population Division.

This week we will explore the data a bit more to see how global population data impacts the economic fortunes of Australia.

Global population is determined by the two variables of births and deaths. Since we will all die eventually (I hope I didn’t spoil the ending for you), the more important variable is births.

Births are measured either in total number of births or in the total fertility rate (TFR). This measure is often casually referred to as a nation’s birth rate. That’s incorrect but who cares.

The TFR describes the average number of children that are born to a woman over her lifetime. A global TFR of around 2.1 children is called the replacement rate and translates to a more or less stable global population. Whether the population actually ends up being stable depends on the number of deaths that occur.

Once the global TFR falls below 2.1, we know that human population will peak a few decades later. As the chart below shows, the UN expects the TFR to fall below 2.1 in a few short decades.

When exactly depends on the scenario we look at. The global TFR is just an aggregate of all national TFRs. Any upwards or downward movement in the most populous nations has a huge impact on global population in the long run.

For the next 60 years according to the UN (or the next 40 years according to most other population institutes) the world will see a growing human population. From then onwards, humanity will shrink right down to size.

What does a growing and then shrinking global population mean for Australia?

Australia operates a very simple economy and only sells four things to the world: Mining products, agricultural products, tourism, and international education. If these four things are in high demand globally, Australia is doing well.

On top of this, Australia relies heavily on migration to grow its population base and GDP – a good rule of thumb is that two-thirds of our population growth comes from overseas while only one-third is homemade (more babies than deaths). To continue our high migration approach, we need a global pool of potential migrants to tap into.

We specifically need people aged 18 to 39. At the moment over three-quarters of all migrants moving to Australia each year fall into that age bracket.

The UN predicts that by 2045 the world will see the population of migration-age decline. In the economically developed nations the cohort has been shrinking since 1991.

Australia only needs to attract a relatively small number of migrants each year and can continue to attract migrants well past 2045 at scale.

The global competition for migrants will speed up though as ageing nations try to soften the demographic ageing process. It is fair to assume that attracting migrants will become a more costly endeavour.

The days of charging migrants high visa fees will come to an end and generous handouts (likely in the form of tax cuts) will eventually be introduced – but that development is easily three decades out.

So, what does the bullish global population forecast for the next 40 years from the UN mean for Australia?

More humans around the world will eat Australian food (global population growth to continue for another six decades). More humans will be rich enough to consume Australian exports (growth here likely continues for more than six decades) and are more likely to become global tourists.

More city dwellers (urbanisation will easily continue to increase for half a century) will indirectly consume Australian iron ore and coal as they use steel to build more skyscrapers; the electrification of the global transport network drives demand for mining products and leads to structurally elevated resource prices (car batteries are nothing but a few mining products thrown into a blender).

Climate change will continue to disrupt harvests around the world (this translates to elevated food prices and benefits our huge food export industry); the global economy will transition into a knowledge economy meaning more people will need a high quality university education.

In short, she’ll be right. Our simplistic national business model will continue to deliver wealth for the next few decades.

Demographer Simon Kuestenmacher is a co-founder of The Demographics Group. His columns, media commentary and public speaking focus on current socio-demographic trends and how these impact Australia. His latest book aims to awaken the love of maps and data in young readers. Follow Simon on Twitter (X), Facebook, LinkedIn for daily data insights in short format.