Global growth slows as populations age: Moody's
By Anne Padieu and Laura Dixon, AFP
August 8, 2014, 12:00 am TWN
PARIS--As populations age around the world, economies will be held back and growth trends will slow sharply in the next 20 years, a report forecast on Thursday.
The mismatch of old people to the numbers of people at work is no longer a shadow only over advanced economies; it now extends to emerging markets as well, a report by rating agency Moody's said.
This demographic time bomb, and related drop in household savings, could reduce the trend of annual growth worldwide by 0.4 percent by 2019, the agency warned.
Between 2020 and 2025 the impact could be “much larger,” amounting to 0.9 percent, it said.
Analyzing the impact of a major shift in the age demographics of workers around the world, the agency said that more than 60 percent of countries that feature in its credit ratings will be classified as aging by next year, with more than seven percent of their populations aged over 65.
By 2020, it said, the number of “super-aged” societies, where more than a fifth of the population are 65 and older, will increase from three today to 13. By 2030, the number will reach 34.
U.S.-based Moody's monitors the resilience of public finances and issues credit ratings for government debt bonds.
Aging a Worldwide 'problem'
When a population ages faster than it is replaced by people of working age who produce goods, services and wealth, the costs of providing for the aged can outstrip public and private resources available, over-stretching pensions systems, over-burdening public finances and pushing up interest rates on the bond market.