A Brave Old World: EBRD 2025 Report

Pretty clever naming from the European Bank for Reconstruction and Development (EBRD) this year titled "A Brave Old World." They released their flagship annual analytical publication yesterday, with a specific emphasis on societies with aging demographics and the challenges they present.

tl;dr: not too much net new stuff here that other bodies like OECD haven't already covered in 2025, but there is an interesting take on non OECD countries where younger economies should focus. Here are my top 5 takeaways:

Severe Drag on Growth: We've heard this ad nauseum in recent years, but declines in working-age populations are projected to reduce annual GDP per capita growth by an average of ~0.4 percentage point between 2024 and 2050, putting heavy pressure on living standards.

AI is Only a Partial Solution: Even under optimistic scenarios, technological advances like AI are projected to provide, on average, only around half of the required productivity growth needed to offset projected losses.

Migration and Fertility Limits: Maintaining current working-age ratios would require annual net immigration to exceed 1% of the total population through 2050, a historically unprecedented amount. Meanwhile, pro-natalist policies adopted across the regions have yielded limited and often transitory effects on fertility.

Aging Electorate Blocks Reform: This section is a nod to growing protests from Gen Z around the world. Necessary reforms (pension adjustments, migration frameworks, risk-taking for innovation) are constrained by aging electorates and leaders. Older voters, who dominate the electorate, tend to be risk-averse, favor the status quo, and prioritize spending on healthcare and pensions over growth-oriented policies like immigration or education.

Divergent Demographic Imperatives: EBRD regions face two distinct challenges: Aging economies (Emerging Europe) must prolong productive working lives, while younger economies (Central Asia, SEMED, SSA) must rapidly create sufficient numbers of high-quality jobs to convert their growing labor force into a demographic dividend.

On this last point, the report urges governments in younger economies to capitalize on their demographic by urgently creating a sufficient number of high-quality jobs and strengthening education and entrepreneurship. Without policies to absorb this growing labor force, this demographic advantage risks turning into social and economic strain. That's a pretty nice way of saying: get young people into jobs urgently before they start causing trouble.

cc: Nepal