The next decade was always going to be difficult. As retirement beckons for the middle-aged “bulge” in many national populations, governments have been facing an expensive demographic transformation. Now, the economic crisis makes the outlook only worse.
Once the recession passes, countries will need to work on closing their gaping fiscal deficits without triggering further collapses in output. They will also need to service bloated national debts. The International Monetary Fund estimates that among the Group of 20 nations whose leaders meet in London this week, the industrialised members will have increased their national debts by an average equivalent to nearly 25 per cent of gross domestic product between 2007 and 2014.
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