"Aging without policy changes will present challenges," the report titled 'AG!NG' said.
"With only modest increases in longevity and declines in fertility and outmigration resulting in shrinking younger cohorts, countries in Central Europe and the Baltics are can expect to face several economic and social challenges in the absence of adaptive policy responses," the report warned.
"Declines in the size of the labor force could present risks to economic growth; fiscal pressures could strain countries’ efforts to provide adequate services as well as income security to their aging populations; firms could lose out on productivity gains if they fail to adapt to an aging workforce."
"Provided countries can put policies in place that allow them to address these challenges, aging Central European and Baltic countries can continue to realize gains in economic output and welfare, and converge to high EU income levels."
However, the World Bank warned that a successful outcome is "by no means automatic."
"It will require early and coordinated policy initiatives covering labor markets, healthcare, education, pensions, long‐term care, migration and family policy."
"How can Central Europe and the Baltic States respond to their aging challenge? The solution lies in investing in people to enable them to age actively and healthily—with scope for action at the level of governments, firms and individuals," the report says.
Latvia faces one of the most severe demographic crises of all the countries surveyed and populations in Central Europe and the Baltics will experience a rising share of older generations in the future.
The median age in the region is set to increase from 40 in 2010 to 45 in 2030 and to 47 in 2050. Close to half (47 percent) of the population will be aged 50 or older by 2050.
The population share of the very elderly (aged 80) will increase from 3.5 percent today to just above 5 percent in 2030 and almost 8 percent in 2050.
The full report can be viewed here: World Bank AG!NG Report