Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  London Stock Exchange  >  Standard Chartered    STAN   GB0004082847

Mes dernières consult.
Most popular
News SummaryMost relevantAll newsSector newsTweets

Standard Chartered : Why ageing has implications on the macroeconomy

share with twitter share with LinkedIn share with facebook
share via e-mail
03/04/2017 | 04:22am CET

The ageing phenomenon has been a dominant feature of Western economies over the past few decades, but Asian economies will age the most rapidly in the next phase, with China, Thailand, Korea, Singapore and Hong Kong set to age fastest.

In a new special report, Standard Chartered's global research team assesses the policy responses of countries in the region that most urgently need to tackle challenges related to ageing.

It also analyses the timing and impact of ageing on gross domestic product growth and its implication for household savings.

While many advanced economies have a high share of the 65-plus age group in their population, emerging markets currently represent two-thirds of the world's elderly. The United Nations forecasts that the share of those aged 65 and above in emerging markets will rise to almost 80 per cent by 2050. China already has 131 million seniors, more than double the combined older generations of the three most-aged economies in the world - Japan, Italy and Germany.

South Korea and Singapore are set to become "hyper-aged" societies (defined by the UN as those in which seniors make up more than 21 per cent of the population) by 2030; they are already "ageing" (seven to 14 per cent of the population is 65 and above). Thailand and China will become hyper-aged by 2035.

Asia and other emerging-market regions are getting older faster than previously has been seen. It will take China and Singapore 25 years to progress from an ageing society to an aged society, according to UN projections. By comparison, it took the UK 45 years, the US 69 years and France 115 years.

The acceleration of ageing means some societies will get old before they reach high-income status. This could create challenges, including limiting their ability to move up from middle-income status. Thailand and China are likely to face this challenge in the next few decades. The macroeconomic impacts of ageing on an economy are varied, the most direct and significant of which is through labour supply. Standard Chartered estimates that after decades of positive contributions to GDP growth, demographics will become a drag by 2020 for China, Korea, Hong Kong and Thailand and by 2025 for Singapore.

Standard Chartered estimates that growth in China's labour force contributed more than 1.5 percentage point to GDP growth on average between 1996 and 2000, and over three percentage points in the early 1980s. By 2030, based on current demographic trends, the shrinking of the labour force will reduce GDP by 0.25 percentage point. However, the report shows that modest improvements in the quality of labour can delay the impact of ageing on GDP growth. For example, the negative effect for China could be postponed by 10 years.

Equally, on the positive side, the senior consumer market in emerging economies has considerable growth potential, leading to estimates that spending by the 65-plus age group in some major emerging markets (including the Brics along with Indonesia, Malaysia, the Philippines, Mexico, South Africa and Turkey) could increase by more than 400 per cent to $4.4 trillion in 2030 from $800 billion in 2015.

Samantha Amerasinghe, economist on thematic research, said: "The next phase of global ageing will be driven by rapid ageing in key Asian economies. The speed of Asia's demographic transition is a major concern as it means that many countries in the region risk growing old before they get rich. While governments in Asia have undertaken many reforms to tackle the challenges of a rapidly ageing demographic, their continued attention to balancing its negative effects alongside the positive aspects of rising personal consumption amongst the "silver economy" over the longer term will prove crucial."

Demographic trends are challenging Asia's traditional family values system. China is facing a "4-2-1" phenomenon, whereby an only child is responsible for two parents and four grandparents.

Institutional support is not yet in place to respond to the rapid rise in ageing. Pension systems remain unsustainable despite recent policy reforms. In China, the nationwide pension system may run a deficit as early as 2030; Thailand will likely run a deficit from 2041. By then, the pension systems in Korea and Vietnam should also run small deficits.

Policies to raise fertility rates have been widely adopted in Asia to tackle the effects of ageing. They have so far proven unsuccessful. Fertility rates for the major economies - including China, Thailand, Japan, Singapore and Korea - remain well below the population replacement rate of 2.1.

Initiatives to raise female labour participation are likely to have the largest immediate impact in offsetting the drag on labour-force and GDP growth from ageing. Child-care provision in places like Japan and Korea has had a positive effect, but their impact has generally been modest, hampered by entrenched social norms.

Measures to upgrade seniors' skills are prevalent only in advanced Asian economies such as Korea, Japan and Singapore.

- busin

(c) 2017 Khaleej Times. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

share with twitter share with LinkedIn share with facebook
share via e-mail
06:38p FTSE advances, led by gains in financial services
02:07p STANDARD CHARTERED : Bank CEO, Private Legal Practitioner Appear At Commission
12/08 STANDARD CHARTERED : Publication of Supplementary Prospectus
12/08 STANDARD CHARTERED : Ultimatum for Standard Charted Bank If...
12/07 STANDARD CHARTERED : Statement on finalisation of Basel III reforms
12/06 STANDARD CHARTERED : Goldman and Standard Chartered eyeing 750 new jobs in Polan..
12/05 STANDARD CHARTERED : Clifford Chance advises consortium of banks on $457 million..
12/05 FTSE slips on recovering sterling, cyclical falls
12/05DJStandard Chartered Plans New Office in Eastern Europe
12/05 Goldman Sachs, Standard Chartered eye 750 new jobs in Poland
More news
News from SeekingAlpha
11/28 UK banks could cope with 'disorderly' Brexit
11/01 Standard Chartered's (SCBFF) Management on Q3 2017 Results - Earnings Call Tr..
11/01 Standard Chartered PLC reports Q3 results
08/02 Standard Chartered's (SCBFF) CEO Bill Winters on Q2 2017 Results - Earnings C..
08/02 Standard Chartered PLC 2017 Q2 - Results - Earnings Call Slides
Financials ($)
Sales 2017 14 527 M
EBIT 2017 4 093 M
Net income 2017 1 468 M
Debt 2017 -
Yield 2017 1,34%
P/E ratio 2017 22,40
P/E ratio 2018 15,38
Capi. / Sales 2017 2,31x
Capi. / Sales 2018 2,18x
Capitalization 33 529 M
Duration : Period :
Standard Chartered Technical Analysis Chart | STAN | GB0004082847 | 4-Traders
Technical analysis trends STANDARD CHARTERED
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 22
Average target price 9,42 $
Spread / Average Target -7,4%
EPS Revisions
William Thomas Winters Group Chief Executive Officer & Director
José Viñals Chairman
Doris Honold Group Chief Operating Officer
Andrew Nigel Halford Group Chief Financial Officer & Executive Director
Michael Gorriz Group Chief Information Officer
Sector and Competitors
1st jan.Capitalization (M$)
BANK OF AMERICA30.91%303 009
WELLS FARGO6.24%292 272