Moody's report: Population aging threatens the global economy
Moody's has announced that the increasing elderly population and declining worker ratio will create serious pressure on public finances, expenditures, and growth.
Credit rating agency Moody's warned that the aging population and shrinking workforce on a global scale, particularly in Western countries, will create major pressure on fiscal balances, public expenditures, and economic growth.
Demographic Data for Europe and the US
According to European Commission data, the European Union population is expected to peak in 2029 and then enter a long-term decline period.
According to projections by the US Census Bureau, the country's population is not anticipated to peak until 2050.
Changes in the Ratio of Workers to Retirees
Today in G7 countries, there are approximately three working-age individuals for every person aged 65 and over.
Moody's expects this ratio to drop to about two working-age individuals by 2050.
Pressures on Public Finances
Olivier Chemla, Moody's vice president, stated that an aging population will create slower economic growth and an increase in retirement costs.
The aging population directly affects consumer demand, real interest rates, and government bond yields.
Artificial Intelligence and Production Capacity
It is anticipated that artificial intelligence and productivity gains could partially alleviate the long-term problems created by the aging workforce.
However, it is stated that a gap on the demand side may remain since robots are not yet consumers.
The Situation of Developing Countries
Demographic shifts affect not only developed countries but also developing economies such as China, Brazil, Thailand, and Turkey.
It is emphasized that these countries will face the costs of aging at lower income levels compared to developed economies.