Aging will tend to be less pronounced in developing economies than in advanced economies over the forthcoming two decades. In addition, economic growth and the speed of financial market development will be greater in developing countries. Under the gradual convergence scenario, the saving rate of the developing world will inch down from a peak of 34 percent in 2014 to 32 percent in 2030, while the saving rate for high-income economies will fall from 20 percent to 16 percent over the same period (see figure below). However, the world will not run out of savings because the global saving rate depends not only on country-level saving rates but also on economies’ relative sizes. The shift of global economic weight toward high-saving developing economies means that, by 2030, developing countries will account for 62–64 percent of total world saving, depending on which scenario is considered, up from 45 percent in 2010. This increase will compensate for the reduction in saving rates at the country level, so that the global saving rate will remain more or less unchanged.
With robust economic growth moderating the negative impacts of aging and financial market development on developing countries’ saving rates, and with no significant increase in investment demand as growth slows moderately after 2020 in most countries, it is unlikely that there will be increased tension between global saving supply and capital demand. Accordingly, there will not be significant upward pressure on yields, even in the rapid convergence scenario, under which the average global yield is expected to rise by roughly half a percentage point between 2014 and 2030.