Parts of region risk ‘getting old before becoming rich’

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