The European Bank for Reconstruction and Development (EBRD) warns in its semiannual report that population ageing is already hindering economic growth in some countries and risks creating long‑term economic turmoil unless governments act now (EBRD semiannual report).
Key findings and projections - In emerging Europe, the falling share of working‑age people is projected to reduce annual per‑capita GDP growth by on average almost 0.4 percentage points each year between 2024 and 2050 (EBRD). - The EBRD says demographic change is already eroding living‑standards growth and will act as a drag on GDP growth in the future. - Post‑communist countries are “ageing before they get rich,” EBRD Chief Economist Beata Javorcik told Reuters, noting that the average age in those countries is about 37 while average GDP per capita is roughly $10,000 — only a quarter of the level seen in advanced economies when their median age was similar (Reuters; EBRD).
Drivers of falling birth rates - The report highlights multiple causes of declining fertility rates, including shifting social norms and the reduction in women’s professional earnings after having a child. - Although nearly all EBRD countries offer some incentives to raise birth rates, Javorcik said these measures have not produced meaningful, sustainable changes in any country (EBRD).
Limits of migration and technology - The level of migration required to offset falling birth rates is politically unacceptable in most places, the report notes. - Public opinion is largely ambivalent about using artificial intelligence more aggressively to raise productivity (EBRD).
Policy levers and recommendations - The EBRD identifies extending working lives as the largest practical lever to counteract demographic decline. Achieving this would likely require retraining programs and reforms to pension systems. - Javorcik urged honest, adult conversations with voters about demographic realities and stressed the need to inform younger voters in particular, since they will bear the burden of pay‑as‑you‑go (PAYG) pension systems (Reuters; EBRD).
Leaders are ageing too - The report also highlights a political dimension: global leaders are older than average adults. The median leader is now 60 years old — 19 years older than the average adult globally — and the gap in authoritarian governments widened to 26 years in 2023 from 19 years in 1960 (EBRD). - Older leadership cohorts tend to favor pension limits and tighter migration policies, which can make demographic responses more difficult to implement (EBRD).
A narrow window for younger, faster‑growing countries - Younger EBRD member economies and developing countries (including some in Africa) should prioritize fast private‑sector job creation and business expansion to exploit a fleeting demographic dividend, Javorcik said. She warned that declining birth rates in parts of Africa mean the window of opportunity is short (EBRD).
Sources: EBRD semiannual report; comments by EBRD Chief Economist Beata Javorcik reported to Reuters.
