It’s not just the U.S. that’s about to lose its main engine of growth – a large demographic group of peak spenders. This troubling turn has already begun in the euro zone, from the UK and Germany to France and Spain. Russia’s demographic trend is also on the decline. And of course, so is Japan’s, as we discuss regularly. Even China is on the edge of this precipice. Most people just don’t know it…
Mass media stories on China only talk about the bright side – China’s relatively high economic growth rate. They never talk about the dark side – that China’s growth driver will fall victim to the same tragedy Japan’s did… and Europe’s has… and as ours is… an aging population.
Have a look at this chart I found in a Societe Generale research report…
As we’ve talked about before, Japan is leading the demographic decline. China and the U.S. are bringing up the rear.
There are still a few countries on the upswing though. Brazil’s demographic trend has yet to peak, although it’s close… and Indonesia still has several years before its demographics begin to decline.
Most of the countries just beginning to trend upward are in Africa. This is why the area is beginning to get attention as a “frontier” market. But political instability in these regions make for a troubling proposition for new investors.
And finally there’s India…
Not only is India growing at rates that rival China’s, the country has many more years to go before it will lose its demographics tailwind. And the political system is more stable in India, than say, Egypt. But it still has major infrastructure and power deficiencies that make investing in the country problematic.
With 80% of the world economy going over the edge of the demographics cliff in the next few years, are we really left looking to India and Egypt for new investment opportunities!?
It seems so. This is why we’ve been sounding the alarm bells of the global slowdown we see lasting through 2020… and why we already have our eye on several demographic dividend kings set to lead the country’s march upward.