Moody’s warns of EU population peak in 2029 and long-term decline

The European Union's population is projected to peak in 2029, after which it will enter a period of long-term decline, according to the European Commission. Moody’s warns that the rapid aging of society is creating fiscal instability well before total population shrinkage occurs.

In G7 economies, the current ratio of approximately three working-age individuals for every person over 65 is expected to drop to two-to-one by 2050. This shift is projected to increase government spending on pensions and healthcare while simultaneously limiting productive capacity and altering consumer demand.

Regional trends vary significantly. The United States is not expected to see a population peak until 2080 under primary projections, or 2043 in low-migration scenarios. Meanwhile, emerging economies such as China, Brazil, Thailand, and Turkey are aging at much faster rates than Europe did historically, often while possessing significantly lower income levels.

While automation and artificial intelligence may bolster business productivity to offset labor shortages, Moody’s notes they cannot resolve issues related to consumer demand, as “robots can produce but they do not consume” goods and services.