The Wide Angle – Predictions of a Rogue Demographer via Sanjeev Sanyal, Global Strategist, Deutsche Bank.
The world is approaching a major turning point in its demographic trajectory and we think that the shift is likely to be sooner and sharper than mainstream projections suggest. In our view, global fertility will fall to the replacement rate in less than fifteen years. Population may keep growing for a few more decades from rising longevity but, reproductively speaking, our species will no longer be expanding. We forecast that world population will peak at around 8.7bn in 2055 and will then decline to 8bn by 2100. Thus, world population could peak half a century sooner and, by 2100, stand 2.8bn below what the UN currently predicts.
Demographer: Fertility rate
Developed countries have long had low birth rates but the largest declines in fertility are in developing countries with the Chinese, Russians, Koreans and Brazilians no longer replacing themselves. A large decline in the Chinese workforce is now unavoidable irrespective of the removal of the one-child policy. Due to a skewed gender ratio, we found that China no longer has enough child-bearing age women to stabilize its population.
Aging societies will respond by extending working lives. In our view, most readers of this report will be both working and healthy into their seventies. This will impact everything from consumer patterns to university systems but we are confident that aging societies are not about retirement homes.
Demographer: Growing workforce forecast
China’s transformation from being the “factory to the world” to being “investor to the world” will create opportunities for younger countries like Indonesia, Philippines and, most importantly, India. Interestingly, United States is likely to enjoy a growing workforce into the 2050s (i.e. longer than most emerging markets) although falling birth-rates among immigrants will dampen the trajectory. We also think that Germany will prove surprisingly good at absorbing immigrants and will do much better than the UN’s dire demographic projections.