A growing young population and the resultant changes in the savings and investment patterns would be advantageous for the country's economy going forward, according to a study by DB Research, a part of the German financial powerhouse Deutsche Bank.
"Brazil and India are demographically in a substantially more favourable position than China and Russia...India, by contrast, will enjoy a very favourable demographic momentum for another three decades (over the other three).
"This will impact not only her economic growth prospects, but also savings and investment behaviour and potentially – if somewhat difficult to quantify – financial market growth prospects," DB Research has said.
According to the United Nations, the working-age population would rise by a stunning 240 million over the next two decades in the country, equivalent to four times the total population of Britain.
"The demographic developments in the BRICs over the next 10, 20, 30 years will vary greatly," the report noted."The differences in the projected change in the working-age population – the economically relevant variable – are very significant in both absolute and relative terms," it added. In terms of the demographic transition model, country is at the beginning of stage three (declining fertility and population growth), Brazil and China are at stage four (low mortality and fertility, and population trending towards stability), while Russia is already at stage five (sub-replacement-rate fertility and declining population), DB Research report said.
The working-age population of Brazil is expected to rise by 20 million, in contrast, in Russia it would decline sharply by almost 20 million, the report said quoting UN projections.Moreover, economic policies can help buffer the negative demographic impact on per-capita growth by, for example, encouraging urbanisation or greater labour participation.
This would be especially relevant in relatively rural China and India, the DB Research report said.Thus, those demographically challenged among the BRIC nations, have significant scope to offset intensifying demographic 'drag' by way of technological progress and capital accumulation.