European Bank for Reconstruction and Development.
The report assesses how rapid ageing, declining fertility, and shifting population structures are reshaping labour markets and economic prospects from emerging Europe to Central Asia and the southern and eastern Mediterranean (SEMED).
According to the findings, demographic pressures are intensifying in emerging Europe, where falling fertility and shrinking working-age populations are expected to shave almost 0.4 percent off annual GDP per capita growth between 2024 and 2050.
By contrast, parts of Central Asia and the SEMED region continue to benefit from younger demographic profiles that support near-term growth—although these regions, too, will begin ageing in the coming decades.
Sub-Saharan Africa, where fertility is gradually declining, stands at the threshold of a potential demographic dividend if its rapidly expanding labour force can be absorbed into productive employment.
“Demography is not destiny; how economies respond is a matter of choice,” said Beata Javorcik, the EBRD’s Chief Economist. “Ageing societies can encourage individuals to work longer, attract and integrate migrant workers, and harness technology to sustain growth. Younger economies can invest in education and entrepreneurship to turn their demographic potential into a lasting advantage.”
The report highlights that fertility rates across many EBRD economies have fallen well below the replacement level of 2.1 children per woman. Despite government measures—from cash transfers and subsidized childcare to extended parental leave—persistent increases in birth rates remain elusive.
Demographic shifts are already influencing labour markets, pushing employment towards more “age-friendly” jobs that offer flexibility and require less physical effort, enabling older workers and women to remain economically active for longer.
At the same time, advances in artificial intelligence (AI) and automation are accelerating changes in skills demand.
While AI may boost productivity in some sectors, it also risks displacing workers in others, underscoring the need for continuous reskilling and lifelong learning. Migration, the report notes, is another crucial lever, though offsetting population ageing through migrant inflows alone would require levels unprecedented in most countries.
In younger economies, the report stresses the importance of fostering entrepreneurship and expanding access to finance to create sufficient jobs for new labour-market entrants. Beyond economic implications, demographic change is also reshaping political dynamics: ageing electorates increasingly influence public-spending priorities, with older voters favouring pensions and healthcare while younger generations prioritize education, housing, and climate action, a divide that may complicate future reforms.
The report concludes that demographic transition will be central to shaping the next phase of development across EBRD regions. Governments that act early and adopt inclusive, forward-looking policies can transform demographic headwinds into opportunities, supporting growth, easing fiscal pressures, and strengthening resilience in what the report calls a “brave old world.”
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