South Asia's 1.17 Billion Working-Age People Face a Fast-Closing Economic Window

The findings come from the World Bank report titled Demographic Change in South Asia: From Tailwinds to Headwinds for Development, which examines how population changes could reshape the region's economic future.

South Asia has a major opportunity to strengthen its economy through its enormous working-age population of 1.17 billion people, but the region is running out of time to take full advantage of this demographic strength. A new World Bank report warns that the working-age population will reach its peak in less than a decade before beginning to decline, creating growing challenges for employment, economic growth and social protection. By 2049, South Asia is expected to become an aged regional economy, with people aged 65 and older accounting for 14 per cent of its total population.

The findings come from the World Bank report titled Demographic Change in South Asia: From Tailwinds to Headwinds for Development, which examines how population changes could reshape the region's economic future. Since 2000, the growing proportion of adults in their prime working years has helped increase South Asia's GDP by 0.4 per cent and raise labour productivity by 1.1 per cent annually. This demographic advantage has supported economic expansion, but its contribution is expected to weaken as the number of older people increases and the working-age population begins to shrink.

South Asia is experiencing population ageing at a faster rate and at a lower income level than many comparable developing economies, leaving governments with limited time to prepare for the economic consequences. The region is expected to move from an ageing population to an aged population within just 25 years, compared with an average of 32 years for developing economies. The annual contribution of demographic changes to GDP growth is projected to fall to just 0.1 per cent by 2050, highlighting the importance of creating productive employment and strengthening essential public services.

South Asia's Growing Workforce Faces a Serious Employment Gap

Despite having one of the world's largest working-age populations, South Asia continues to struggle with insufficient employment opportunities and widespread informal work. According to the World Bank, only 60 per cent of the region's working-age population is employed, and approximately 88 per cent of employed people work in informal jobs that often provide lower earnings and limited job security. These employment conditions make it difficult for millions of people to build financial stability, develop professional skills and contribute fully to economic growth.

The report identifies better education, improved healthcare and stronger workforce skills as essential measures for making the most of the region's remaining demographic advantage. Governments are encouraged to expand access to finance for micro, small and medium-sized enterprises, simplify business regulations and remove barriers preventing women from participating in the workforce. Creating more productive and better-paying jobs could help South Asian economies sustain growth even as the share of people in their prime working years gradually declines.

World Bank Vice President for South Asia Johannes Zutt warned that countries across the region are growing older earlier in their development journeys than many other economies. He stressed the importance of investing in job creation, infrastructure and workforce development before the demographic opportunity begins to disappear. Stronger employment opportunities could help countries benefit from their current youthful populations and prepare for a future in which healthier older people remain economically active.

Ageing Population Raises Concerns Over Healthcare and Pension Systems

Population ageing is creating another major challenge for South Asia, where healthcare, long-term care and pension systems remain poorly prepared to support a growing number of older citizens. People are living longer, but additional years of life do not necessarily mean better health, increasing the need for accessible medical services and support for age-related conditions. Without stronger healthcare systems and financial protection, ageing could place greater pressure on families, public resources and economic development.

Pension coverage remains particularly limited, with only 17 per cent of South Asia's working-age population contributing to a pension scheme. Just 10 per cent of older people receive any pension benefits, representing the lowest level of pension coverage globally and leaving many elderly residents without a reliable source of retirement income. These gaps highlight the urgent need to expand social protection systems that can provide financial security and reduce vulnerability among older populations.

World Bank Calls for Jobs, Better Healthcare and Stronger Social Protection

The World Bank recommends a two-part strategy that helps South Asian countries benefit from their existing working-age populations and prepares them for the economic effects of ageing. The first priority involves sustaining the region's youth dividend through productive employment, stronger businesses, better education, improved health and greater participation of women in economic activities. The second priority focuses on developing a new demographic dividend by strengthening pension systems, expanding long-term healthcare and encouraging savings and investments that improve productivity.

A healthier and more financially secure older population could continue contributing to economic activity, reducing some of the pressures associated with a shrinking workforce. Investments in healthcare, workforce development and retirement security could also help governments maintain productivity and support economic growth as demographic conditions change. The report makes clear that South Asia's demographic advantage will not last indefinitely, making the coming years particularly important for decisions that could shape employment, living standards and economic stability for future generations.