Moody's Warns Aging Western Populations to Strain Public Finances by 2029
Credit rating agency Moody's has issued a warning that aging Western populations will place significant strain on public finances due to fewer workers and higher costs. Europe is expected to be particularly affected, with the European Union's population projected to peak by 2029, followed by a sustained long-term decline. While the U.S. Census Bureau projects the American population to peak later, around 2080 under its main projection or 2043 under a low-immigration scenario, Moody's notes that fiscal pressures from aging populations emerge well before actual population shrinkage. Currently, G7 economies have approximately three working-age individuals for every person over 65, a ratio expected to fall to about two by 2050. This demographic shift will impact economic growth, increase pressure on public finances for pensions and care costs, alter consumer demand, and influence real interest rates and sovereign yields.