IMF Releases “World Economic Outlook (WEO): A Critical Juncture Among Policy Shift” Report

1. The IMF has updated its global growth forecasts, lowering the growth projection to 2.8% for 2025, with India’s growth expected at 6.2%.
2. The update reflects concerns over trade tensions, policy uncertainty, and highlights the importance of policies that promote healthy aging and encourage older individuals' participation in the labor force.

Key Observations:

1. Aging Economies: Worldwide, economies are rapidly aging due to declining fertility rates and rising life expectancy. This shift is causing many countries to move from a "demographic dividend" to a "demographic drag."
2. Global Population Trends: The average age of the world’s population is expected to increase by 11 years between 2020 and the end of the century.
3. Healthy Aging: Alongside longer life expectancies, older individuals have seen improvements in their functional capacity. For instance, a 70-year-old in 2022 had the same cognitive ability as a 53-year-old in 2000.

Benefits of Healthy Aging:

1. Impact on Global GDP: Healthy aging could boost global GDP growth by 0.4 percentage points from 2025 to 2050. India is expected to make a significant contribution, as the share of workers aged 50 and older is projected to grow faster in that period.
2. Labor Force Participation: Policies aimed at improving health for older workers can increase their participation in the labor force, contributing positively to economic growth.

Policy Recommendations for Healthy Aging:

1. Comprehensive Approach: The report suggests combining pension reforms, workplace training, adaptations, and health-focused interventions to extend effective retirement ages.
2. Reducing Labor Force Participation Gaps: Addressing gender disparities by promoting female labor force participation through improved work-life balance and affordable childcare is crucial to counter the demographic challenges.