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Global Aging 2010: An Irreversible Truth

Global Aging 2010: An Irreversible Truth

The 2010s had been considered by previous Standard & Poor's reports the window of opportunity to address the challenges posed by aging to the sustainability of public finances. Through the next decade, governments likely have some breathing space as we expect pressure from age-related spending will remain relatively moderate over this period. Nevertheless, while this window to implement fiscal sustainability strategies remains open, it will not be for long with the expected acceleration in spending starting in 2020. Against the backdrop of large deficits in some countries, we expect undertaking budgetary consolidation and pension or health-care system reforms simultaneously will prove politically challenging, and could lead to delays in policy implementation. In our view, the maneuvering room has shrunk and delays in policy implementations may generate additional political, economic, and budgetary costs.