It’s the old story as ageing UK population threatens economy
Global economic growth will be dragged down sharply by ageing populations over the coming decade, analysts at credit ratings agency Moody’s warned today.
And Britain will be one of the countries hit hardest, as our population is unusually old.
Across the world as a whole, GDP will be hit by as much as 0.4 per cent per year from this year to 2019.
And ageing will drag down growth by 0.9 per cent each year from 2020 to 2025.
So-called super-aged countries, with more than 20 per cent of the population over 65 years old, will be hit hardest.
Britain will enter that category by 2025. Germany, Finland and Japan are already in that bracket.
By 2030, 34 countries will count as super-aged.
“The unprecedented pace of aging will have a significant negative effect on economic growth over the next two decades across all regions,” said the report from Moody’s.
“Sixteen countries will see a decline of over 10 per cent in their working-age population in the same period.”
Older populations mean a smaller proportion of adults will be in work, hitting labour supply.
Ageing will reduce savings as adults earn more than they spend when they are in work, then spend those savings when they are retired.
This will have the knock on effect of lowering the funds available for investment, the analysts said, further reducing economic growth.