Emerging markets are set to account for 80% of the world’s elderly population by 2050, which is likely to put a strain on public finances, according to estimates from Bank of America Merrill Lynch quoted by the Financial Times (paywall). But not only is this a case of EMs mirroring trends in developing countries, “the transformation in the emerging world is happening at a rate inconceivable to most westerners.” The bank warns that age-related spending already makes up 40% of public expenditure in the developed world, and “rising age-related costs are likely to push 60% of sovereigns into speculative grade”. Projections from the OECD suggest the changing demographics “will hit the finances of EM governments hard.” Ageing populations are also likely to “force many EM governments to spend more on healthcare,” BofA argues. “At present, emerging economies spend only 5.6 per cent of GDP on healthcare, compared with 12.5 per cent in developed countries, according to the World Economic Forum.”