New Delhi India, Pakistan, and two other countries buck the trend amid Asia’s massive shrinkage of working-age populations. An analysis by Moody’s Investor Services reveals that the median working age for Asia’s top economies is 50. These include, among other things, nations like China, Singapore, Korea, Japan, Thailand, and Hong Kong. It says that while nine of these major Asian economies are consistently observing a decline in working-age populations, India (0.4%), Pakistan (4.7%), Bangladesh (0.2%), and the Philippines (1.3%) hold up the bright side. The average working age in these four countries is 25 years old, providing some relief.
The developing economies of India (0.4%), Pakistan (4.7%), Bangladesh (0.2%), and the Philippines (1.3%) hold up the bright side. An analysis by Moody’s Investor Services reveals that the median working age for Asia’s top economies is 50. These include, among other things, nations like China, Singapore, Korea, Japan, Thailand, and Hong Kong. “Young, growing, and increasingly wealthy populations have supported Asia’s economic expansion. But parts of the region are now aging rapidly, in some cases at relatively low income levels,” the report said.
Demographics have a substantial impact on businesses, financial institutions, and economies.
According to the report, in 2022, the young and wealthier population positively impacted banks, technology services, and telecommunications. Financial institutions willingly lent out more loans, thus increasing liquidity and initiating cycles of innovation and entrepreneurship. On the other hand, the ageing population negatively impacted the economy by making banks, automobile manufacturers, and the entertainment industry vulnerable.
This raises major concerns for investors worldwide, who look up to Asia for its vitality and dynamism. In a poll conducted during Moody’s 2023 Global ESG Summit, 37% of participants voted for demographic shifts like the ageing population as the most significant emerging issue that will impact credit markets.
The report said that governance and infrastructure can foster a demographic dividend in economies witnessing growth in working-age populations. It also advocated quality education and immigration to mitigate the impact of population ageing.
According to the Asian Development Bank, Asia’s elderly population is projected to reach nearly 923 million by the middle of this century. In one of its studies, ADB found that fast-shifting demographics - particularly increasing life expectancies and declining birth rates - will majorly shape the economic direction of developing economies in Asia. It said that the encouraging demographics that have driven high economic growth in the region are likely to reverse.
“Asia’s population is ageing quickly,” said Juzhong Zhuang, ADB’s Deputy Chief Economist. “As the population dividend that fueled Asia’s rapid growth becomes a tax, the region must find innovative ways to sustain economic expansion and provide better support for its growing elderly.