Pablo Hernández de Cos: Population ageing and economic policies - challenges in the 21st Century

Speech by Mr Pablo Hernández de Cos, Governor of the Bank of Spain, at the Bank of Spain-CEMFI Conference on Ageing, Georgetown University Global Economic Challenges (GEC) Network, Madrid, 17 November 2023. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
21 November 2023

Distinguished guests:

Good morning. The Banco de España is delighted to host this exciting conference on ageing. A warm welcome to the speakers that have come to Madrid for this event and to all participants.

This conference is part of the Georgetown University Global Economic Challenges Network, which sponsors a series of international workshops that bring together leading scholars and policymakers to discuss some of the most important economic problems of our time.

I would like to thank all the organizers. Special thanks to professor Francis Vella for making this conference a reality and to Olympia Bover at the Banco de España and Manuel Arellano and Rafael Repullo at CEMFI for the impressive programme they have put together.

A major demographic change is in motion, one that will only accelerate as the 21st century progresses. The baby boom from the 1950s to 1970s, the fall in fertility starting in the 1970s and steadily rising longevity are set to dramatically change the size and age composition of the population and the labour force alike.

This demographic change is global, affecting developed countries to a greater extent but less developed ones too. According to United Nations forecasts, the world population is expected to peak at 10.4 billion by the end of this century. 

Spain is one of the countries where the demographic change will be felt most acutely. We enjoy one of the longest life expectancies at birth (currently over 80 years for men and over 85 for women), and suffer from one of the lowest fertility rates (1.2). The Spanish population is still increasing, but only because of immigration flows which rebounded after the COVID-19 crisis.

According to forecasts from the Spanish Statistical Office, only under very optimistic assumptions regarding the recovery of fertility rates and immigrant arrivals would the working-age population (i.e. individuals aged 16 to 67) not decline but hold at around the current level of 32 million.