TOKYO, Japan - Japan's low birth rate and ageing population pose an urgent risk to society, Prime Minister Fumio Kishida said Monday, pledging to address the issue by establishing a new government agency.

Birth rates are declining in many developed countries, but in Japan the issue is particularly acute because it has the world's second-highest proportion of people aged 65 and over, after the tiny state of Monaco, according to World Bank data.

"The number of births dropped below 800,000 last year, according to estimates," Kishida told lawmakers in a policy address marking the start of a new parliament session.

"Japan is standing on the verge of whether we can continue to function as a society," he said.

"Focusing attention on policies regarding children and child-rearing is an issue that cannot wait and cannot be postponed." The conservative leader said his policies -- including launching the new Children and Families Agency in April -- were designed to support parents and ensure the "sustainability" of the world's third-largest economy.

Kishida added that he eventually wants the government to double its spending on child-related programmes.

"We must build a child-first social economy to reverse the (low) birth rate," he said.

Japan has a population of 125 million and has long struggled with how to provide for its fast-growing number of elderly residents.

Birth rates are slowing in many countries including Japan's closest neighbours, due to factors including rising living costs, more women entering the workforce and people choosing to have children later.

Official data showed last week that China's population shrank in 2022, for the first time in more than six decades.