Transition Report 2025-26: Brave old world

Our new Transition Report 2025-26: Brave old world looks at how demographic change is impacting economies across the EBRD regions and beyond. It examines the implications of current demographic trends in both rapidly ageing economies and countries with young, fast-growing populations.

Ageing economies under strain

Emerging Europe is getting old before it gets rich. Low fertility, more retirees and fewer workers are weighing on its economic prospects, with the impact of population ageing projected to reduce annual GDP per capita growth by almost 0.4 percentage point on average between 2024 and 2050.

Reforms focused on raising the pension age, increasing women’s labour-force participation and harnessing technology and migration can help offset some of the demographic pressures. Yet, none of these policies are straightforward.

Raising the pension age is politically unpopular, large-scale migration can be contentious, and boosting innovation is far from trivial. While AI may increase productivity for some workers, others may be displaced and need retraining.

Youthful regions and narrow windows

For younger economies, the challenge may be different, but it is no less urgent. In Central Asia, the southern and eastern Mediterranean and sub-Saharan Africa, youthful populations offer a potential demographic dividend. But this window of opportunity may be short lived. Turning population growth into lasting prosperity requires the creation of high-quality jobs, the strengthening of education and measures to foster entrepreneurship. Without these policies, today’s demographic advantage could become tomorrow’s burden.

The greying of politics

As populations age, so do electorates and political leaders. Older voters, who participate more regularly in elections, are increasingly shaping policy priorities, often favouring healthcare and pensions over education, migration and growth-oriented reform. The report warns that the greying of politics could limit scope for change unless younger voices are mobilised.

Demography is not destiny, however. How economies respond is a matter of choice. Early, courageous and well-communicated reforms will be critical in order to ease demographic strains and secure long-term prosperity.

The full report is available here.