‘Aging population, other factors influenced IMF’s WEO report’

Story: Rebecca OKINE, Accra

ECONOMIC Contributor with Zed Multimedia, Mr. Emmanuel Boateng, has stated that the aging population of advanced countries is the key factor behind the IMF’s World Economic Outlook (WEO) report predicting a 0.4% decline in global growth for 2025 and 2026.

Speaking on the Business Breakfast on ZED on 101.9fm, Mr. Boateng explained that when a significant portion of a country’s labor force falls within an older age group, it directly affects productivity levels. He noted that advanced economies such as the United States, Germany, and France have older populations compared to emerging and developing countries like Ghana, which have a younger demographic.

“In Ghana we have more young people than old people, but this is not true for some advanced countries,” said Mr. Boateng. “Some of them, have an older population because of policies around birth control and so because they are the drivers of the global economy, their population growth significantly affects the global economy and the rest of the world.”

Aging populations and their economic implications

Research from the National Labour of Medicine shows that an aging population tends to result in labour force reduction which can lead to decreased productivity and slower economic growth. As the workforce ages, there are fewer people available to contribute to economic output, which can lead to labour shortages and higher social costs.

Mr. Boateng explained that while emerging markets and developing economies, like Ghana, are growing faster than advanced economies, their influence on the global economy is limited. This is because advanced economies, which he describes as “the big players” still hold the largest share of global economic output, and affect the global economy.

“Take a country like the United States, it is the global world which is viewed as one, and so they recording a slower growth is more or less an aggregate of the entire world,” said Mr. Boateng. “Because of the interconnected nature of the world economy, when advanced economies are grappling with ageing population and declining productivity, it affects their level of productivity which affects the global economy.”

The World Economic Outlook (WEO) Report The World Economic Outlook (WEO) is a biannual report published by the IMF which reviews and forecasts global economic conditions in both the short and medium term. It provides an analysis of economic trends and projections for advanced, emerging, and developing economies, while also addressing key global issues. The most recent WEO report, released on January 10, 2025, forecasts global growth at 3.3%, which is below the historical average of 3.7% observed over the past two decades since 2000. The report also projects a decline in global inflation for 2025 and 2026 which is expected to be more evident in advanced economies.