A review of Asian economies from the International Monetary Fund found some negative impacts emerging from aging. Photo by Stephen Shaver/UPI | License Photo
May 2 (UPI) -- With a U.N. report predicting a slowdown in China's economy dragging on oil prices, a review from the IMF says there may be further economic impacts from aging.
Crude oil prices turned lower in Monday trading following a report from the U.N. Economic and Social Commission for Asia and the Pacific that found Chinese economic growth is on a slow track downward. Representing about 42 percent of the gross domestic product from the developing economies in the Asia-Pacific, the U.N. body said Chinese demand was subdued as growth moderated from 6.9 percent in 2015 to 6.7 percent last year. Growth in 2017 is expected at 6.5 percent for GPD, a slowing further to 6.4 percent next year.
Expanding economies in Asia are accelerating faster than the rest of the developed world. A preliminary estimate of first quarter GDP growth in the United States, for example, was less than 1 percent. Fourth quarter U.S. growth was 2.1 percent.
At a time when energy market analysts are watching supply and demand metrics closely, a report from the International Monetary Fund found the impact of an aging Asian population could influence economic growth.
"The impact of aging could potentially drag down Japan's average annual GDP growth by 1 percentage point over the next three decades," the report read. "While in India and the Philippines, which have some of the youngest populations in the region, a growing workforce could potentially increase GDP by that same amount."
Asian growth dynamics could extend beyond crude oil markets into liquefied natural gas. Royal Dutch Shell in its annual report said China and India, among the fastest growing economies in the world, are leading the pack in terms of growth in LNG imports. Australia, where Shell has considerable holdings, is among the lead exporters of the super-cooled form of gas.
LNG relies less on pipelines than conventional gas and therefore offers more options to island nations in Asia. A review of the Asian markets by the U.S. Energy Information Administration found the regional demand for gas is on the decline, however, because of slower economic growth, cooler weather and, for Japan, the resurgence of nuclear power.
The IMF's assessment on aging could have long-lasting impacts on energy markets.
"Many countries, particularly in East Asia, will be the fastest-aging societies in the world in the next few decades," it said. "The region's population growth, which is already negative in Japan, is slowing and projected to fall to zero by 2050."