The world is ageing at a record pace and this has significant consequences and both developed and emerging market economies will be negatively affected.
Countries such as Russia, Thailand, Chile and China are seeing rapidly deteriorating demographics while even relatively young countries such as Brazil and Turkey are ageing.
Yahoo reported Moody’s Senior Vice President Elena Duggar as saying:
“Demographic transition…is upon us now,”
“Estimates show that ageing will reduce aggregate annual economic growth by 0.4 percentage point in 2014-19 and by a much larger 0.9 percentage point in 2020-25,”
While by 2030, 34 countries will become”super-aged” currently only three countries are already classified as ‘super-aged’ societies – Germany, Italy and Japan.
According to the Moody’s Investors Service report, world-wide ageing will mean a lower supply of labour and a decline in savings rates that will reduce investment
The authors of the report do however say policymakers can mitigate the effects.
They say countries can soften the blow of an ageing population by making policy changes to immigration to expand the workforce and by investing in technology to increase productivity.
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