Japan's birth rate in 2005 dropped to a record low of 1.25 babies per woman, the Health Ministry reported Thursday, adding to concerns over the country's aging population and its economy.

Japan also reported a negative birth rate for the first time on record, with the number of deaths in 2005 exceeding births by 21,408.

The trend threatens to leave Japan with a labor shortage, erode the country's tax base and strain the pension system as fewer taxpayers support an expanding elderly population.

The country's birth rate was 1.29 in both 2003 and 2004, already the lowest figure since the government began releasing birth figures in 1947, according to the Health Ministry.

The new figures "show that our efforts to deal with the declining birth rate have been important and necessary. The data must be accepted gravely," Prime Minister Junichiro Koizumi said.

Accounting for infant mortality and other factors, fewer than 2.1 babies per Japanese woman represents negative population growth, with potentially dire consequences for the economy and the care of the elderly.

The number of births in Japan stood at 1,062,604 last year, down 48,117 from the previous year, statistics released by the ministry showed. The number of deaths totaled 1,084,012, up 55,410 from 2004.

The drop in births, despite government efforts to encourage couples to have more children, also reflects changing lifestyles. Many women are foregoing or delaying marriage to pursue career opportunities.

The average age of newlyweds last year was 28 for women and 29.8 for men, both up by 0.2 years.

In an attempt to encourage women to have more babies, the government began a five-year project last year to build more daycare centers, while encouraging men to take paternity leave.

Yet Japanese companies typically expect long hours from workers, and many women with careers feel they cannot meet the demands of both work and family and must choose one or the other.

Thursday's report follows the recent release of gloomy population data.

In April, the government confirmed the nation's population had fallen from a year earlier for the first time on record, declining by 8,340 from December 2004 to November 2005. It was the first yearly decline since the government began compiling data in 1899, though data for 1944-1946 are missing.

Japan isn't alone in worrying about the need to encourage births.

In the 25-nation European Union, the average birth rate is around 1.5, dropping to less than 1.3 in some countries, including Greece, Spain, Italy and new EU member nations in eastern Europe where fertility rates slumped after the collapse of communism.

Last month, President Vladimir Putin called population declines of hundreds of thousands a year one of Russia's most serious problems and urged parliament to offer financial incentives for families to have more children.