Population ageing reduces growth – Natixis

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Demographics considerably impact countries’ economic situation. As analysts at Natixis note, there is a significant gap between the economic vigour of a “young” country and that of a country affected by population ageing. 

Population ageing weakens growth

“A decline in the working-age population directly reduces growth. But population ageing also reduces growth through indirect mechanisms: Lower productivity gains if the labour force is old; In the first stage of ageing, a high household savings rate; A reduced need to invest; Declining foreign direct investment.”

“It is not surprising that the economies of ageing countries are less vigorous.”