Aging Does Not Have to Mean Slowing Down Growth

It is a common belief that aging societies are destined to face slower economic growth and heavier fiscal burdens. However, a new analysis from the International Monetary Fund (IMF) turns this narrative on its head. With improved health and labor market inclusion, older populations could drive growth. According to IMF simulations, if people aged 50 and older remain active in the labor force thanks to continued health improvements, global GDP could grow by an additional 0.4 percentage points annually between 2025 and 2050. In short, longevity can be turned into a potential asset instead of a problem, and this asset is waiting for the right support systems to be unlocked.

THE PRODUCTIVE AGING

Experts from the IMF opinionated that "70s are the new 50s." What this means is that a 70-year-old in 2022 would have the same cognitive health score as a 53-year-old in 2000, which serves as evidence of how far healthcare has progressed in just two decades. This has profound implications; with proper policy support, seniors can continue contributing meaningfully to both formal employment and informal caregiving, extending their "human capital" well beyond traditional retirement ages. Still, what this demands is not simply health system expansion but integration: policies that align healthcare, lifelong learning, and flexible work environments to support productive aging, and this requires broad support.

POLICY MATTERS, AND SO DOES TIMING

With the IMF’s projections assuming continued progress in both health and labor supply trends observed in recent decades, action is needed now to ensure those trajectories continue. Reforms in retirement age, job design, and age-friendly employment practices from the public sector side must be paired with investments in preventive health and digital access for older adults done by the private sector. Countries that delay this transition risk facing rising dependency ratios without the buffers of extended working life. Moreover, while advanced economies may have more institutional capacity to adapt, emerging and developing countries face steeper challenges. This is especially true in Southeast Asia, where the population is aging, but social safety net systems and technological development in many areas have not yet reached their peak. The IMF concludes that to ensure a genuine and inclusive development for the senior population, these countries will need support, especially on the financial and policy guidance fronts. This will be a challenge that international organizations must address.

Aging is a transformation, and like all transformations, its impact depends on how it is managed. With coordinated and inclusive policymaking, the demographic shift can be turned into a demographic dividend. Rather than framing aging as a burden, humanity should frame it as a design challenge: how can vitality, purpose, and participation be extended across citizens' lifespans? If this is done right, growth in an aging world will not only be sustained but also redefined for every generation and for generations to come.

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