The economic and financial impact of demographics
Population ageing is one of the most disruptive trends of the twenty-first century: it is affecting nearly all sectors of the society, from labour market and productivity to savings and consumption behavior.
- Ageing is a global phenomenon of unprecedented magnitude and speed. It will exacerbate the pressure on public welfare systems and can contribute to a higher political uncertainty.
- Economically, ageing as well as the shrinking of the working population will likely lower growth and hence the neutral key rate while dissaving will lead to upside pressure on inflation.
- On balance the demographic changes are expected to reduce real yields in the years to come. Equity sectors related to the ageing process will benefit, including Asset & wealth management.
- The increasing importance of private provision will open up new opportunities for the insurance sector.
- Investment behavior is expected to shift towards less risky, cash flow yielding assets.
- EM will dominate future ageing-related investment opportunities.
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LIFE AFTER COVID -
THE LDI VIEW