Australia is experiencing a “baby recession” as the number of births has fallen to a 17-year low due to rising cost-of-living pressures.

Australia is facing a “baby recession,” with the cost-of-living crisis being attributed to the nation’s plunging birth rate. Analysis by KPMG Australia has revealed that the nation recorded a 17-year low in births in 2023, following a 4.6 percent year-on-year decline in babies born.

The analysis, released on Wednesday, showed that there were just 289,100 births last year—the lowest number since 2006—amid financial pressures on household budgets. KPMG Urban Economist Terry Rawnsley noted that it has been more than four decades since Australia last experienced such a significant decline in births.

“We haven’t seen such a sharp drop in births in Australia since the period of economic stagflation in the 1970s, which coincided with the initial widespread adoption of the contraceptive pill,” he said. The 2023 figure was well down from the 315,200 births recorded during the 2021 post-lockdown spike.

“Following the uncertainty of pandemic lockdowns, people who had held off having children decided to start families,” Mr. Rawnsley said. “The record-low unemployment rate and the stimulus money that flowed into the economy had provided encouragement for people to start having children again.

“With the current rise in living expenses applying pressure on household finances, many Australians have decided to delay starting or expanding their families. This combination of the pandemic and rapid economic changes explains the spike and subsequent sharp decline in birth rates we have observed over the past four years.”