The APEC region is going through seismic demographic changes which will impact economic growth, financial stability, and fiscal budgets. A shrinking labour force and slower productivity growth will hinder economic performance, while emerging liquidity risks and lower risk appetites will affect investment and innovation. At the same time, public finances are under pressure with higher government spending combined with shrinking revenue bases.

This policy brief explores these effects in detail with accompanying projections and empirical data for the APEC region. It recommends a multi-pronged approach to mitigate the adverse effects of demographic change. Policy options include expanding, extending, and augmenting the workforce; ensuring longer and healthier lives; promoting financial security; and rethinking public finances. These steps are critical for economies to mitigate the far-reaching impacts of demographic change and ensure that past successes of healthy lives, better education, and growing affluence are maintained.