An Age-Old Question
December 31, 2015 | HSBCEstimated reading time: 2 minutes
World population growth will be the slowest in at least 65 years in 2016. The number of retired people will grow at the fastest rate in history while most residents of high-income countries will be aged over 40 for the first time.
Lower fertility rates and longer life expectancy are leading to shrinking and ageing populations in many parts of the world – not just developed countries.
Demographics are a key determinant of potential economic growth, but the changes in global population over the next few years are unprecedented. Japan’s population started to shrink in the mid-1990s and Germany’s began contracting around 2000, but now the working-age population of the world’s most populous country, China, is shrinking for the first time.
The challenges posed by ageing populations are particularly pressing in developed markets. Their working-age populations grew by 0.1 per cent a year over the past decade but will fall 0.3 per cent each year until 2025. Without a change in policy, economic growth will be hampered by the labour force reducing each year until 2050. After decades of providing a dividend to global expansion, demographics will now pull down growth rates significantly.
Smaller populations mean less demand and less potential output. A higher ratio of retirees to working-age people means greater expenditure on healthcare and less tax income.
Globally, although working-age populations are still growing, we expect global potential growth to be 0.6 percentage points lower each year over the next decade compared with the past 10 years.
The turning point is sharp. Babies born soon after the Second World War are starting to retire and developed markets have seen fertility rates fall below the 2.1 replacement level of the past 40 years.
Page 1 of 2
Suggested Items
Trump Copper Tariffs Spark Concern
07/10/2025 | I-Connect007 Editorial TeamPresident Donald Trump stated on July 8 that he plans to impose a 50% tariff on copper imports, sparking concern in a global industry whose output is critical to electric vehicles, military hardware, semiconductors, and a wide range of consumer goods. According to Yahoo Finance, copper futures climbed over 2% following tariff confirmation.
Seeing a Future in Mexico
07/09/2025 | Michelle Te, I-Connect007The Global Electronics Association (formerly known as IPC) has been instrumental in fostering a partnership with Guanajuato, a state north of Mexico City with 12 industrial clusters and close to 150 companies involved in electronics. This past spring, Alejandro Hernández, the undersecretary for investment promotion in Guanajuato, attended IPC APEX EXPO 2025 at the invitation of IPC Mexico Director Lorena Villanueva, where he met with several companies to discuss the opportunities available in Mexico. He is inviting electronics-related companies seeking long-term investment in a centrally located area with access to highways, railways, and ports.
Webinar Review: A Global Trade and Economy in Flux
07/09/2025 | I-Connect007 Editorial TeamIn a July 8 webinar, Global Electronics Association Chief Economist Shawn DuBravac provided a comprehensive analysis of the evolving international trade environment, its implications for inflation, monetary policy, and labor dynamics, and a sober assessment of market valuations. In “Navigating a Shifting Landscape” DuBravac painted a picture of a global economy in flux, where shifting trade alliances and tariff structures are redrawing the supply chain map and influencing the broader economic landscape, while also conveying an overall bullish market outlook.
GlobalLogic, Volvo Cars Deepen Collaboration to Engineer the Future of Mobility
07/09/2025 | GlobalLogicGlobalLogic Inc., a Hitachi Group Company and leader in digital engineering, has announced it has been selected in Volvo Cars’ partnership ecosystem as one of the strategic partners within engineering services globally.
GlobalFoundries to Acquire MIPS to Accelerate AI and Compute Capabilities
07/09/2025 | GlobalFoundriesGlobalFoundries announced a definitive agreement to acquire MIPS, a leading supplier of AI and processor IP. This strategic acquisition will expand GF’s portfolio of customizable IP offerings, allowing it to further differentiate its process technologies with IP and software capabilities.