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Thursday, April 02, 2009

The effects of the recession are tiny compared with population ageing

The International Monetary Fund estimates that the G 20 nations will, as a result of the recession, have increased their national debts by an average equivalent to nearly 25% of gross domestic product between 2007 and 2014. That is a lot of money.

BUT, to 2050, the cost of the economic crisis will be no more less than 5% of the financial impact created by the ageing of their populations. As the IMF says, “in spite of the large fiscal costs of the crisis, the major threat to long-term fiscal solvency is still represented, at least in advanced countries, by unfavourable demographic trends”.

This factlet is taken from a long and detailed article in today’s FT. It is hard to come to grips with the enormity of the effects of ageing on the world’s major economies.Dick Stroud

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