The World Bank has published a report projecting that population ageing will reduce the demographic contribution to South Asia’s annual GDP growth to 0.1 percent by 2050. The region is expected to move from an aging to an aged population in 25 years, compared with 32 years for the average developing economy. The report recommends expanding productive employment while strengthening healthcare, care for older people and pension systems. Employment gaps limit the benefits of the region’s working population. Only 60 percent of people of working age are employed, and 88 percent of employed workers work informally. Pension protection is also limited: 17 percent of the population of working age contributes to a pension scheme, while only 10 percent of older people receive pension benefits, the lowest coverage globally. Recommendations include expanding access to finance for micro, small and medium enterprises, streamlining regulations and removing barriers to women’s employment. Stronger health and pension systems, alongside greater savings and investment, could support older populations and raise productivity. In Bhutan, the population of working age is expected to peak in 2031, narrowing the window to benefit from its youth dividend. Large firms account for just 0.3 percent of businesses but employ 32 percent of workers, indicating limited dynamism across the broader economy. Family duties keep one in three women aged 15 to 24 out of employment, education or training. Bhutan also has the region’s highest education spending per student, yet its test scores do not exceed those of countries spending considerably less. Priorities include translating education investment into skills relevant to employers and expanding employment opportunities, particularly for young women and youth.

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