Japan’s population declined the most on record in 2013, highlighting the demographic challenges faced by the Prime Minister in his campaign to revive the world’s third-largest economy.

Estimated births, deaths

japanThe population fell by 244,000, according to health ministry estimates, which has been shrinking for several years now.

The ministry said births fell about 6,000 from a year earlier to 1,031,000 estimated, and deaths increased about 19,000 to 1,275,000.

If current trends persist, the country will lose a third of its population in the next 50 years. A quarter of the population is currently aged above 65 and that number is expected to reach almost 40% by 2060.

Challenge for Abe’s campaign

Increasing welfare costs for an aging country threaten to worsen a debt burden that is already twice the size of the economy.

Japan has taken aggressive measures to spur growth after years of stagnation.

The administration of Prime Minister Shinzo Abe is trying to improve the economy through a combination of quantitative easing and cash injections, higher taxes, higher spending, and long-term reforms.