The economic and financial impact of demographics

Highlights:

• 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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