In a global overview, Standard Life Investments economists said while demographics are not the be-all and end-all of economic growth, they are important.
Standard Life Investments said the demographic dividends of the developed economies are now well behind them; China’s have just expired, while the Philippines and Vietnam are coming into theirs now.
The overview said ageing populations are dealing with increased demand for healthcare and public transport at a time when the number of workers is growing slowly or even contracting.
“Such negative effects are compounded when, as is the case for many OECD countries, relatively generous public pension schemes have not been pre-funded in an actuarially sound manner,” Standard Life Investments said. “Although there is plenty of scope for productivity-enhancing reforms to partially offset these demographic headwinds.”
The overview said while the effects of an ageing population will be felt most intensely in developed markets, emerging markets will also be dramatically affected by the changing structure of their workforces and populations.
“Most of the emerging world, excluding Africa and South Asia, is at the point where demographics are becoming less favourable for growth,” said Standard Life Investments.
“Changing demographics will present the biggest challenges to China, Brazil, and Thailand, while being beneficial to Indonesia, India and most of Africa over the next few decades.”
