Belgium, more than most other industrialized countries, is vulnerable to the costs associated with an aging population. Among a group of eighteen industrialized countries, only Italy is more vulnerable to this cost. This is evidenced by research conducted by BNP Paribas Fortis, which was discussed during the 2024 Macroeconomic Outlook presented by the bank.
As far as the bank is concerned, Belgium must urgently take “structural measures” to limit rising costs. She points out that in a study conducted in 2003, our country was still one of the countries with moderate vulnerability. The countries with worse scores at the time have since surpassed Belgium, with the exception of Italy.
In this context, Fortis’ chief economist, Quinn de Leeuw, is struck by the fact that the Anglo-Saxon countries are among the least vulnerable, “due to their lower dependence on state pensions and the less negative development of the dependency ratio.” Scandinavian countries also perform relatively well.
To assess vulnerability to aging, De Leeuw takes into account five ratios: government revenues, the evolution of the dependency ratio (the ratio between the younger and older population and the working-age population), total net government debt, and the share of government debt. State pensions and the updated value of additional obsolescence expenses for the period 2022-2050 on top of current expenses.
Belgium generally scores average on these ratios, but regarding the latter, only Italy scores worse.
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