Demographic pressures will reduce living standards in large parts of Europe and elsewhere as ageing populations add pressure on governments to implement tough policies such as raising retirement ages, a report warns.

Falling fertility and working-age populations are projected to reduce annual GDP per capita growth by almost 0.4 percentage points on average between 2024 and 2050 in eastern Europe and the Caucasus, according to a report by the European Bank for Reconstruction and Development published on Tuesday.

The international lender’s study primarily focuses on the ‘emerging’ European countries in which it invests, such as Poland, Bulgaria and Slovenia, but it also extends its analysis to several advanced economies where the effects of an ageing population will be starker.