The global fertility rate in Latin America went from 6 children per woman in the sixties to less than 2.0 on average in countries such as Brazil, Chile, Costa Rica and Mexico, according to the United Nations. This means that each new generation will be smaller than the previous one.
The population of people over 60 is growing considerably. ECLAC indicates that, about 88 million in 2022, it could reach about 100 million in 2025. According to World Bank calculations, by 2050 one in four Latin Americans will have more than 60 years (25% of the population), so the region faces an unprecedented demographic transformation.
The accelerated aging of the population, driven by low fertility, not only alters our social dynamics, but also impacts the economic level. The urgent question is: how much will it cost us and what opportunities can this change open?
According to the Inter -American Development Bank, on average, Latin America allocates 4.3% of GDP to pensions and 4.1% to health. Health spending for older people could rise up to 175% by 2050, while the demand for long -term care will triple in 30 years. Models inspired by advanced economies recommend the application of mixed schemes: “fiscal limit” of long -term and complementary savings mechanisms with tax incentives, such as in Australia or the United States.
But there are also opportunities for the economy. This population represents a segment with growing economic power: globally, the “Silver Economy” contributed 34% of the world GDP in 2022 (45 billion dollars) and could reach 39% by 2050.
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Latin America ages: What is the cost and opportunities for the future?
Financial institutions have the possibility of designing products designed for this segment (insurance, savings, credit, financial inclusion), particularly for older women, who represent 55% of the group and face structural challenges such as lower income and low pensions.
ECLAC recommends an investment of 4.7% of GDP in care infrastructure by 2035, which could generate 31 million jobs in more than 23 countries.
The decrease in “demographic bonus” compromises labor growth, so the International Monetary Fund invites you to incorporate older adults into the labor market.
On the other hand, the people of this population segment with the capacity to invest in the stock market have a very different profile from that of young investors. Its main objective is no longer to accumulate long -term wealth, but to keep heritage, ensure constant income and minimize risks. Among the most common alternatives are fixed income instruments, the shares of consolidated companies and mixed investment funds.
Population aging in Latin America represents a crossroads: it can be a fiscal ballast or an engine of economic and social transformation. The key is in the public strategy. Without reforms or investment in the region, we will face a sustainability crisis; With comprehensive policies, we can activate a more inclusive, equitable and productive economy.
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