This year, Thailand has become a complete aging society, as we have 20% of the population aged over 60, and 14% aged over 65. This means we have actually entered an aging society since 2005, but the proportion of those aged 65 and above has just reached 14% in this year.
From the statistics, it seems that the elderly have more purchasing power than the younger generation. That’s why the market for products and services catering to the seniors is growing steadily. However, many Thai seniors have inadequate retirement savings.While their productivity has declined, their health-related expenses have increased, making them depend more on financial support from their children.
Currently, the economic growth driven by the increasedpurchasing power of elderly people is offset by the decliningpurchasing power of the working-age population. There is another issue that has recently emerged although its impactis not that obvious for now; as the living expenses are rising,savings for the future are decreasing, resulting in the younggeneration’s decision to not have children to avoid more financial burden. This leads to a decline in birth rate and future workforce, and ultimately national revenues in the future.
This is the major issue anyone still working must understand and prepare for. They have to plan their earning and spending, as well as their health care and insurance plans. They should also look for more ways to earn income. Older adults need to be cautious with their spending and take good care of their health so they can stay independent or continue to work for many years to ensure a steady flow of income.
Another interesting global trend is that in large consumer countries like China, people are adopting new financial values; a competition to save as much as possible. This trend will soon slow down the global economy, given China’s second-largest economy in the world.
With decreased purchasing power in the country, Chinese manufacturers will have to find new markets for their products by cutting down the prices or relocating their factories to overseas. This could lead to deflation, with prices falling, profits declining, and then the stock prices dropping accordingly.
In the end, the middle class will have to take the hit. As Thai manufacturers won’t be able to compete with those Chinese manufacturers who have both cost advantage and government support, the employment rate in Thailand will eventually drop.
These are the big challenges that we have to face. So, we must be prepared to minimize the impact or capitalize on opportunities in these circumstances.
It sounds harsh, but I really want to share it with you. In this situation, it’s better to be ready than be surprised.
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