News / Economy

Aging Will Reduce Economic Growth Worldwide in Coming Decades

Aging Will Reduce Economic Growth Worldwide in Coming Decadesi
X
Mil Arcega
August 28, 2014 10:23 PM
The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.

The world is getting older, fast.  And as more people retire each year, fewer working-age people will be there to replace them.  Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world.  But experts say it’s not too late to mitigate the economic impact of the world’s aging populations.  

In Japan - there are special playgrounds for the elderly.

In Italy - dance classes for seniors are part of the “good life.”

And in Germany - the rapid pace of retirements has become a bigger issue than unemployment.

They are the world’s "Super Aged" nations - the term for countries where at least 20 percent of the population is 65 years or older.

“The demographic transition is upon us now and its progressing, by historical standards, quite rapidly," said Elena Duggar, head of Moody's Sovereign Risk Division..

In five years - six more countries will join the ranks of the super-aged.  And by 2030 - that number will rise to 34.  

“That will translate into reductions in labor supply," Duggar said. "At the same time aging means that the household savings rates will go down, which will negatively impact on investment.  Both trends put together would mean that aging will have a significant negative impact on global growth."

Business research group, the Conference Board - says aging could shave as much as one percent off global growth in the next 10 years.  Ignoring the coming changes is risky says economist Fariborz Ghadar - author of "Global Tectonics - What Every Business Needs to Know."

“Economic growth rates will slow down, jobs will not be available for the young, there is going to be conflict both internally in certain countries, externally. 

There’ll be backlash against immigrants and that’s not the kind of world we really want," said Ghadar.

But the solution may be as close as a nation's borders.

"See - the largest addition to the U.S. population is by immigration, it is not by number of children," said economics professor Kishore Kulkarni.

In the U.S. -  the average birth rate is 1.9 children for every woman - an average bolstered by higher birth rates in immigrant families.  Fariborz Ghadar says the trend is obvious when you consider that the birth rate for Hispanic families in the U.S. is 2.3 children.  

“We are turning Hispanic.  And in fact, what I normally tell my audiences, if you want somebody to take care of you when you’re 90 - you better speak Spanish," he said.

While consumer buying patterns will change as populations age, Kishore Kulkarni believes targeted career training and productivity gains through technology could offset the decline in workers.

"It is a misalignment of demand rather than a total and a drastic change in the demand.  And it is a challenge which we can easily accept and tackle as it comes to us," he said.

Kulkarni adds that aging will be less of a challenge in countries where elders are seen as assets rather than liabilities.  But nearly all the experts say young workers, in the future, will work longer and retire later than seniors today.

You May Like

US Firms Concerned About China's New Cyber Regulations

New rules would require technology companies doing business in financial sector to hand over their source code, adopt Chinese encryption algorithms More

WHO Focus on Ebola Shifts to Ending Outbreak

Focus to be less on building facilities and more on efforts to find infected people, manage their cases, engage with communities and ensure proper burials More

US Scientist Who Conceived of Groundbreaking Laser Technology Dies

Charles Townes, Nobel laureate, laser co-creator paved way for other scientific discoveries: CDs, eye surgery, metal cutters to name a few technologies that rely on lasers More

This forum has been closed.
Comment Sorting
Comments
     
by: Yoshi from: Sapporo
August 29, 2014 9:59 PM
I agree growing number of elderly people would affect work forces and economic growth. But I think it is a temporary situation that would end in a few decades.However long the life span get, it must be the limit of life span for mankind. Do you think we could live to be more than one hundred and twenty years old? There must come the day when the number of elderly people decrease and equivalence of age structure would attained in population.Then, small scale nations in the number of population with balanced age composition and work forces would emerge, and eventually sustainable economic growth would be got .

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Super Bowl Ads Compete for Eyes on TV, Webi
X
January 29, 2015 9:58 AM
Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Super Bowl Ads Compete for Eyes on TV, Web

Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Freedom on Decline Worldwide, Report Says

The state of global freedom declined for the ninth consecutive year in 2014, according to global watchdog Freedom House's annual report released Wednesday. VOA's William Gallo has more.
Video

Video As Ground Shifts, Obama Reviews Middle East Strategy

The death of Saudi Arabia’s king, the collapse of a U.S.-friendly government in Yemen and a problematic relationship with Israel’s leadership are presenting a new set of complications for the Obama administration and its Middle East policy. Not only is the U.S. leader dealing with adversaries in Iran, the Islamic State and al-Qaida, but he is now juggling trouble with traditional allies, as White House correspondent Luis Ramirez reports.
Video

Video MRI Seems to Help Diagnose Prostate Cancer, Preliminary Study Shows

Just as with mammography used to detect breast cancer, there's a lot of controversy about tests used to diagnose prostate cancer. Fortunately, a new study shows doctors may now have a more reliable way to diagnose prostate cancer for high risk patients. More from VOA's Carol Pearson.
Video

Video Smartphones About to Make Leap, Carry Basic Senses

Long-distance communication contains mostly sounds and pictures - for now. But scientists in Britain say they are close to creating additions for our smartphones that will make it possible to send taste, smell and even a basic touch. VOA’s George Putic reports.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Saved By a Mistake - an Auschwitz Survivor's Story

Dagmar Lieblova was 14 when she arrived at Auschwitz in December 1943, along with her entire Czech Jewish family. All of them were to die there, but she was able to leave after several months due to a bureaucratic mix-up which saved her life. Now 85, with three children and six grandchildren, she says she has a feeling of victory. This report by Ahmad Wadiei and Farin Assemi, of RFE/RL's Radio Farda is narrated by RFE’s Raymond Furlong.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid

World Currencies

EUR
USD
0.8815
JPY
USD
117.85
GBP
USD
0.6581
CAD
USD
1.2420
INR
USD
61.404

Rates may not be current.