Weekly Economic Briefing

When I'm 64

21 Februar 2017

Global Overview

  • Rapidly ageing populations pose significant challenges for policymakers across the global economy. Expenditure on pensions and healthcare will need to rise significantly, with a declining proportion of working-age people footing the bill.
  • Expenditure restraint can help limit costs, but tax revenues will probably have to rise to meet these commitments. In an ideal world policymakers would boost long-term growth through reform and investment to ease the fiscal burden.
  • The US should be designing policies to help alleviate its acute demographic challenges, rather than planning unfunded tax cuts. The UK faces similar headwinds and should keep these in mind as it builds a new relationship with the EU.
  • Demographics are set to deteriorate across the Eurozone, but some countries have better policy frameworks to cope than others. Japanese policymakers have already started to address age-related costs. More action will be required.
  • China’s demographics look challenging following years of a one-child policy. With debt already high from an emerging market perspective, policymakers will face some tough choices over coming decades.


The US cannot afford unfunded tax cuts given its demographic challenges and high debt. Remedial action is required to mitigate risks from rising indebtedness.



The Office for Budget Responsibility has warned that public finances are on an unsustainable long- term trajectory. Putting this right poses significant policy challenges.



The Eurozone faces increasing costs from an ageing population. Smart policymaking could reduce the future burden, but politicians lack incentives to do so.


Japan & Developed Asia

Putting Japan on a sustainable fiscal footing is going to require the implementation of unpopular reforms to taxes and spending. These seem to be beyond Shinzo Abe.


Emerging Markets

China is ageing at an unprecedented pace. In addition to slowing growth, this demographic transition will force difficult policy choices.


Standard Life Investments’ Global Strategy team provide regular analysis of the key economic data that has been influencing financial markets.

Available on a weekly basis, the Weekly Economic Briefing takes a detailed look at the global economic issues that have been impacting our investment strategy. The regional approach aims to provide an easy-to-navigate guide to the most recent developments in the global economy.

The views and conclusions expressed in this communication are for general interest only and should not be taken as investment advice or as an invitation to purchase or sell any specific security.

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