Japan's population shrank by an estimated 212,000 people in 2012, claimed the nation's Health Ministry on Monday, as concerns continue to mount the nation's rapidly aging population and low birth rates.

According to the ministry, as cited by the Japan Times, a record low of 1,033,000 babies were born in Japan last year, compared to 1,245,000 deaths in the country, which resulted in a net drop of 212,000 in the nation's population of around 126 million people.

Last year, Japan's National Institute of Population and Social Security Research also predicted that the nation's population would shrink by nearly a third of its current size by 2060, with 65-years-olds and above expected to make up a staggering 40 percent of the population by then.

If conditions remain unchanged", Japan's population may even decrease to 42.9 million by 2110, said the initial report.According to the Health Ministry, the 2012 figures is the largest reduction in Japan's population size since it started recording the data in 1947. Although the ministry reported that the four leading causes of death in Japan were cancer, heart disease, pneumonia and cerebrovascular disease, which together accounted for 60 per cent of the overall death rate, the more worrying concern was the nation's poor fertility rate at just 1.39 births per women.

"On average, a person is born every 31 seconds and a person dies every 25 seconds in Japan," reported the Japan Times.

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Last year, Japanese Chief Cabinet Secretary Osamu Fujimura warned that "the trend of the aging society will continue and it is hard to expect the birth rate to rise significantly."

Although successive Japanese government have tried over the last two decades to improve the nation's birth rate, the country's population has been shrinking since 2007, with most social experts attributing the poor birth rates to the high cost of raising children, more women choosing to remain in the workforce and the country's reluctance to accept immigrants.

Eventually, the largest concern for the country is that an ever-dwindling pool of taxable workers will have to bear greater welfare costs for a growing number of pensioners.