Countries must take urgent action to prevent slowing population growth from undermining their long-term economic prospects, the European Bank for Reconstruction and Development (EBRD) said in its annual report on Tuesday. The bank warned that ageing populations are already hampering growth in some nations, and in emerging Europe, the falling share of working-age people is projected to reduce annual per capita GDP growth by almost 0.4 percentage points between 2024 and 2050.
“Already today, demography is eroding growth in living standards, and it is going to be a headwind for GDP growth in the future,” EBRD Chief Economist Beata Javorcik told Reuters. She noted that post-communist countries are “getting old before getting rich,” with the median age at 37 while average GDP per capita stands at $10,000—a quarter of the level seen in advanced economies when they reached the same median age.
The report identifies multiple factors behind declining birth rates, including changing social norms and reduced career earnings for women who have children. While most EBRD nations have implemented incentives to boost fertility, these measures have not delivered meaningful or sustained change. Migration levels needed to offset falling births are politically unpopular, and citizens remain ambivalent about leveraging AI to raise productivity.
Javorcik highlighted that the most feasible solution is extending working lives, which would require retraining programs and potential adjustments to pension systems. She emphasized the importance of informing younger voters, who will bear the long-term costs of pay-as-you-go pension schemes, about the implications of demographic trends.
Ageing populations also coincide with older political leaders, making reform more difficult. The report found that the average global leader is now 60 years old, 19 years older than the median adult, with the gap widening to 26 years in autocratic nations—a sharp increase from 1960. Older leaders tend to prioritize protecting pensions and limiting migration, complicating efforts to adapt to demographic shifts.
For younger and growing economies, including new EBRD members such as Nigeria, Javorcik urged a focus on job creation and private sector expansion to capitalize on a brief demographic dividend. “This demographic dividend they can enjoy is fleeting,” she said, cautioning that falling birth rates in other parts of Africa signal the need for immediate action.
