The burden of an ageing demographic has far-reaching consequences. It impacts the supply of labour and inflation, and brings with it lower economic growth, fiscal instability of government budgets - leading to forever more government borrowing and risks to credit ratings and weaker geopolitical influence. These consequences need to be considered when allocating capital to different markets in investment portfolios.
The great industrial powers of Germany, Japan and China face significant demographic challenges characterised by low birth rates, declining populations and rapidly ageing societies. China's population, for example, is both ageing and decreasing, with projections of a decrease by 48 million, or around 2.7%, between 2019 and 2050. Additionally, according to the United Nations World Population Prospects, by 2050 each of these countries is projected to have a population with the median age exceeding 50 years.
In contrast, the US, Australia and India display more favourable demographic profiles. The US and Australia have relatively higher birth rates-12 per 1000 and 12.1 per 1000 respectively and younger populations compared with Germany (9.3 per 1000), Japan (7) and China (10.6). Similarly, India has a large and growing population, with 17 births per 1000 and a median age projected to be only 38 by 2050. These advantages provide these countries with larger potential workforces and a greater capacity for economic productivity.
More hands and minds
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
An outrageous, beautiful monopoly
Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.
Drop the anchor to judge value
Buying and selling decisions should be based on where a stock price is going, not where it has been.
Powering the AI boom
Beyond the software and chipmakers, where will the energy come from?
Get into life
Tucked inside super are products that can protect you from life's inevitable uncertainties.
Paths to home ownership
Taking the road less travelled can sometimes deliver unexpected benefits.
Sold! Quick ways to add value
Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.
Money lessons the kids need to know
Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.
Property-investing rules: are they likely to change?
The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.
What's love got to do with it?
A rollercoaster of emotions could be driving poor crypto behaviour.
Are we ready to be cash-free?
Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.
