Last week in an alert from Japan, the first major
country to experience a natural fall in its population, it was reported that as
many as 8.2m houses in the country are vacant - - accounting for 13.5% of the
housing stock - - and the number has increased by 630,000 from five years
ago to a record. The economy is still struggling to exit 15 years of deflation
and according to Moody's it's is one of 3 'super-aged' countries that is set to
become 13 by 2020 and 34 by 2030.
The US ratings agency said the number of
“super-aged” countries - - defined as where more than one in five of the
population is 65 or older - - has only three, Germany, Italy and Japan, in the
category today and it notes that by next year, over 60% of Moody's-rated
countries will be ageing, with more than 7% of their population aged 65 or over.
The unprecedented pace of ageing will impose a
demographic tax that will slow economic growth over the next 20 years in both
developed and emerging market economies, as working-age populations shrink and
household savings rates decline, says Moody's Investors Service and its report,
entitled "Population Ageing Will Dampen Economic Growth
over the Next Two Decades," which is available to clients.
It's not just a developed country issue, with
many emerging markets ageing even more rapidly than their developed peers.
Countries like Russia, Thailand, Chile and China
have rapidly deteriorating demographics. Even relatively young countries such as
Brazil and Turkey are ageing. Moreover, the pace of ageing in some of these
countries is more rapid than in developed economies.
The 13 super-aged by 2020 include the
Netherlands, France, Sweden, Portugal, Slovenia and Croatia. By 2030 they will
be joined by countries such as China, Hong Kong, Korea, the US, the UK and New
The global working-age population will grow
almost half as fast in the years to 2030 as in the previous 15 years, rising by
only 13.6%, down from growth of 24.8%, Moody's said.
The reports says all countries, with the
exception of a handful in Africa, face either a declining working-age
population, or a slower growth rate.
The working-age population will fall by more than
10% in about 16 countries, including Germany, Russia, Ukraine and Japan, between
now and 2030, the report said.
The authors point to a number of policy areas in
which governments can mitigate the impacts of an ageing society on the economy,
such as by raising the number of women and young people who are available for
work, and by raising the retirement age.
It said work-place innovation, higher
productivity rates and "streamlined migration" could also help.
"Innovation and technological progress that
improve labour productivity and human capital can also dampen the effects of the
rapid demographic changes on economic growth over the long term," the report
Worldwide ageing will reduce economic growth via
lower labor supply, and decline in savings rates that will reduce investment. It
is estimated that a one percentage point rise in the old dependency ratio (i.e.,
the ratio of the population aged 65+ to the population aged 15-64), an indicator
of ageing, will lead to a 0.5-1.2%age points decline in the average savings rate
which will affect investment adversely.