Parts of re­gion risk ‘get­ting old be­fore be­com­ing rich’

New Straits Times - - Business -

TOKYO: The In­ter­na­tional Mon­e­tary Fund (IMF) called on Asian economies to learn from Ja­pan and act early to cope with rapidly age­ing pop­u­la­tions, warn­ing that parts of the re­gion risk “get­ting old be­fore be­com­ing rich”.

Asia had en­joyed sub­stan­tial de­mo­graphic div­i­dends in the past decades, but the grow­ing num­ber of el­derly was set to cre­ate a de­mo­graphic “tax” on growth, said the IMF in its eco­nomic out­look re­port for the Asia-Pa­cific re­gion yes­ter­day.

“Adapt­ing to age­ing could be es­pe­cially chal­leng­ing for Asia, as pop­u­la­tions liv­ing at rel­a­tively low per capita in­come lev­els in many parts of the re­gion are rapidly be­com­ing old,” said the re­port.

The pop­u­la­tion growth rate was pro­jected to fall to zero for Asia by 2050 and the share of work­ing-age peo­ple — now at its peak — would decline over the com­ing decades, said the re­port.

The share of the pop­u­la­tion aged 65 and older would in­crease rapidly and reach two-and-a-half times the cur­rent level by 2050.

That means de­mo­graph­ics could sub­tract 0.1 per­cent­age point from an­nual global growth over the next three decades, it said.

The chal­lenges are par­tic­u­larly huge for Ja­pan, which faces both an age­ing and shrink­ing pop­u­la­tion. Reuters

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