Japan's population has started shrinking for the first time this year, health ministry data showed Thursday, presenting the government with pressing challenges on the social and economic front, including ensuring provision of social security services and securing the labor force.

The Health, Labor and Welfare Ministry's annual survey estimates the balance of domestic births of Japanese against deaths in 2005 to be minus 10,000, marking the first natural decline since the government first began compiling the data in 1899.

Even on an aggregate population basis, including foreign residents, the balance is projected to be minus 4,000 in 2005, registering a fall one year earlier than projected by the National Institute of Population and Social Security Research, which had predicted a decline after 2006.