The BlackRock Investment Institute has outlined five mega forces that are shaping the macroeconomic landscape and demographic divergence is another one of them. The aging of populations will limit how much major economies can produce and grow, leaving governments with less tax revenue to support rising retirement and healthcare expenses. The impact of fewer workers could result in lower corporate profits and higher government debt unless economies adapt to mitigate these pressures. So, what does this mean for investors and what risks and opportunities does this megaforce create?
Nicholas Fawcett, Senior Economist in the BlackRock Investment Institute and Peter Fisher, head of BlackRock's Global Retirement Initiative join Oscar to uncover the impact of this megaforce on global economies and the potential risks and opportunities investors should consider.
Sources: “The peak 65® Zone Is Here”, Retirement Income Institute, January 2024; Decoding Demographic Divergence, BlackRock, March 2024; U.N. World Population Projections (WPP) (2022): scenario assuming medium fertility; U.S. Congressional Budget Office (2024), The Budget and Economic Outlook: 2024 to 2034, February 2024
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