The world population is aging. The IMF thinks the global economy could still benefit.

A silver economy is on the rise, shaped by a slowdown in worldwide population growth, drop in fertility falls, and extended lifespans. The IMF’s 2025 World Economic Outlook (pdf) outlines new economic prospects that healthier seniors can unlock as the global age structure shifts, despite challenges to labor supply and public finances.

An aging world: Most economies are approaching or have crossed their “demographic turning point” — where the working-age population begins to decline. By 2035, all advanced and major emerging economies will be on the other side of this shift, with most low-income countries following by 2070. By the end of the century, the worldwide average age is set to rise by 11 years.

Aging creeps in across the world’s youngest regions too: While the biggest advanced economies and emerging markets in Europe and Asia have the largest share of older population, the younger Latin America, Africa, and the Middle East are also on track to see a steep rise in older people. The more fertility falls and lifespans extend, the smaller the window to reap demographic dividends — especially in low-income countries.

Healthier, not just older: Today’s 70-year-olds match the cognitive sharpness of 53-year-olds in 2000, fueling longer careers, delayed retirements, and higher earnings. Better health has raised the chances of seniors participating in the labor force by 20 percentage points. However, challenges like outdated skills, pension limitations, and age discrimination persist for older age groups.

Aging is expected to weigh down in growth: These global demographic shifts are set to slow economic growth and strain public finances over the long term. Overall output growth is expected to decline by 1.1 percentage points through 2050 and by 2 percentage points through 2100, compared to 2016–2018 levels. Output per capita growth is also projected to slow by 0.6 percentage points through 2050 and by 1.8 points by century’s end.

Regional growth implications: Advanced economies like Japan face contraction risks due to aging, while the US and Canada maintain modest growth due to favorable demographics. China will see a sharp growth deceleration (down 2.7 percentage points in 2025-2050), while India, though initially insulated with a 0.7 point slowdown, will face increasing pressure post-2050.

AND- These trends are expected to pressure interest rates downward and threaten debt sustainability. Aging populations save more, invest less, and strain pension and healthcare systems.

Balancing capital and labor: Global aging could also shift capital from older, high-savings nations to younger, capital-scarce ones. At the same time, younger workers might move to aging economies to fill workforce gaps, providing a potential balance in global labor markets and capital flows.

How can countries adapt? Promoting preventive healthcare and reducing risk factors can improve rates of healthy aging. Pension reform and adaptable workplaces, as well as bridging labor market gaps by addressing age, gender, and income disparities, would promote longer working lives. Economies could also boost fertility by supporting childcare and flexible work arrangements that balance career and family. Meanwhile, productivity could be increased by leveraging AI and biotechnology.

The “silver” lining: Measures like increasing senior participation rates, delaying retirement, and narrowing gender gaps could raise annual growth by up to 0.6 percentage points annually through 2050. This would offset almost 75% of the demographic drag during this period, with some countries in Europe and India could see even higher growth.

MARKETS THIS MORNING-

Asian markets are mixed this morning, as investors carefully weigh trade developments and new stimulus measures from China. Japan’s Nikkei is up 0.8%, and Hang Seng (Hong Kong) is slightly up 0.1%, while Shanghai Composite is down 0.2%. Meanwhile, Wall Street futures are pointing to a lower opening ahead of a packed earnings week that has Amazon, Apple, Meta and Microsoft (among other heavyweights) on the docket.

THE CLOSING BELL: TADAWUL-

The TASI fell 0.1% yesterday on turnover of SAR 4.3 bn. The index is down 2.3% YTD.

In the green: Albaha (+9.9%), Saudi Re (+9.8%) and Anaam Holding (+9.3%).

In the red: Zain KSA (-4.2%), Solutions (-3.7%) and Derayah (-2.9%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.1% yesterday on turnover of SAR 33 mn. The index is down 9.2% YTD.

In the green: Tharwah (+8.5%), Naas Petrol (+6.1%) and Neft Alsharq (+5.7%).

In the red: Fadeco (-8.9%), SPC (-6.7%) and SMC (-6.3%).

CORPORATE ACTIONS-

Nomu-listed Hedab Alkhaleej Trading’s BoD recommended a SAR 7.5 mn dividend distribution at SAR 1 a share for FY 2024, it said in a disclosure to Tadawul. The distribution date will be announced once the general assembly gives the nod.

Alinma Bank’s shareholders approved a SAR 746.14 mn dividend distribution at SAR 0.30 per share for 4Q 2024, according to a Tadawul filing (pdf). Distribution will start on 8 May.