Failure to tackle age-related spending may lead to worsening credit ratings: S&P

Thomson ReutersAn elderly couple sit on a bench next crocus flowers in a park in Duesseldorf

LONDON (Reuters) – Facing an ageing population and ballooning healthcare and pension bills, governments around the world will have to reform welfare systems or face a deterioration in their credit ratings, Standard & Poor’s said on Thursday.

The ratings agency looked at 58 developed and emerging nations to assess the economic consequences of demographic changes and concluded that unless countries implemented reforms to tackle age-related spending, more than a quarter of them nations could have “speculative-grade”, or junk, ratings by 2050.

It stressed that governments faced a tough balancing act.

“Policies will thus have to address health care spending to ensure sustainability, while also preventing increases in poverty risks for the elderly and social inequality,” the agency added.

(Reporting by Karin Strohecker; editing by Sujata Rao)

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.