Vietnam's National Assembly has officially repealed its decades-old two-child policy, a move aimed at countering declining birth rates and an ageing population that threaten the country's economic growth AP reports.

The policy, introduced in 1988, was initially implemented to curb population growth following years of war and economic hardship. While enforcement varied, Communist Party members often faced career penalties for exceeding the two-child limit.

Vietnam's fertility rate has steadily declined over the past few years, dropping from 2.11 children per woman in 2021 to 1.91 in 2024, falling below the replacement level of 2.1. Urban areas, such as Ho Chi Minh City, report even lower rates, with a fertility rate of just 1.39 in 2024.

The demographic shift poses significant challenges for Vietnam's economy, as the working-age population is projected to peak by 2042 and potentially decline by 2054. An ageing population could strain welfare systems and hinder economic growth.

To encourage higher birth rates, the government offers substantial family benefits, including six months of fully paid maternity leave, free healthcare for children under six and tuition-free education until high school. Financial incentives are also provided for women having two children before the age of 35.

Despite these measures, cultural preferences for sons have led to gender imbalances. The health ministry has proposed tripling the fine for sex-selective practices to address this issue.