The ageing of the population threatens the note to the druggist

By 2040, the proportion of dependent people in France will go to 44 % compared to 28% today. With it, mechanically an increase in age-related expenditure. A non-negligible risk for the public finances, as stressed by Standard & Poor s The credit rating agency estimates that if no action is taken to counter this trend, the State debt French – including social security, could jump to 166 % of GDP in 2050, compared to 89.6% today.

a Corollary to this bond of debt, the note of France would deteriorate gradually. According to the worst-case scenario prepared by S&P, it would go from AA to A in 2020, and then to BBB as early as 2035. Is the note a are Hungary, Colombia or the Philippines.

of Course, France can count on a good demographic dynamics. With a fertility rate among the highest in Europe, it is expected to see its population reach 74 million by 2050. An increase of more than 15 %, but insufficient, however,to renew the labour force. It is expected to fall from 63 % to 57% over the period.

The table, however, is not entirely dark. First, Standard & Poor’s trusts that the government will not allow the aging population to explode the debt. As much as it is not sure that the creditors of the France follow at such levels.

most Importantly, the rating agency considers that the pressure on the public finances is rather slimmed down since its last survey in 2013. The beginning of fiscal consolidation and the pension reform delaying the age of cessation of work, in fact, have reduced the need for additional expenditure. For as much as by principle, new reforms will be used to take into account the possible prolongation of the life expectancy. The reform of social security has also borne fruit, with a diet that is expected to approach balance in 2017.

For S&P, if these early results are encouraging, policymakers should not rest on their laurels. The agency plans a gradual increase of expenditures on pensions up to a peak in 2025. A topic to be carefully monitored, since ” that they are already one of the highest levels in the world. “

Guillaume Benoit