As things stand, we’re on a path of the world’s population to start shrinking before 2040, with developed markets already on a path to dramatic population decline over the course of the next few decades. This may, of course, change, if some of these factors turn around, but there’s nothing in the data to suggest that they will.
For many, the notion of fewer people is good news: taking the strain off the planet’s resources or public infrastructure. But, with populations ageing rapidly, too, these drops in births pose some pressing fiscal issues down the road.
In a busy election year, the nature of fiscal policy looks set to come more into focus. Demographic change, which is now happening rapidly, looks likely to impose new constraints on the choices governments make about taxation and spending in the years to come.
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